throbber
Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 1 of 75
`
`
`
`
`
`Dennis J. Stewart (SBN 99152)
`GUSTAFSON GLUEK PLLC
`600 B Street
`17th Floor
`San Diego, CA 92101
`Telephone: (619) 595-3299
`dstewart@gustafsongluek.com
`
`Additional Plaintiff’s Counsel Appear on the Signature Page
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`
`
`
`behalf of all others similarly situated,
`
`Plaintiff,
`
`
`JOE KOVACEVICH, individually and on
`
`CLASS ACTION COMPLAINT
`
`
`
`JURY TRIAL DEMANDED
`
`vs.
`
`FACEBOOK, INC., a Delaware corporation
`headquartered in California,
`
`Defendant.
`
`
`
`
`
`
`
`
`- 1 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 2 of 75
`
`
`
`
`
`
`Plaintiff Kovacevich brings this action against Defendant Facebook, Inc. (“Facebook”),
`individually and as a class action, pursuant to Rule 23 of the Federal Rules of Civil Procedure, on
`behalf of himself and similarly situated individuals who maintained a Facebook social media profile
`since 2007. Plaintiff seeks treble damages and injunctive relief for Facebook’s longstanding and
`continuing violations of section 2 of the Sherman Act, 15 U.S.C. § 2 and violations of California
`state statutory and common law. Plaintiff alleges as follows based on personal knowledge, the
`investigation of Plaintiff’s counsel, and on information and belief.
`NATURE OF THE ACTION
`Facebook is now the largest social media platform in the United States and in the
`1.
`world. As of July 2020, Facebook reported having 2.7 billion monthly active users for its main
`Facebook product. Facebook also has a number of other product offerings: Instagram, Facebook
`Messenger, WhatsApp, and Oculus. When all of these product offerings are combined, Facebook
`boasts 2.47 billion daily active users and 3.14 billion monthly active users worldwide. In the United
`States, Facebook accounts for over 45 percent of monthly social media visits. Moreover, the
`Facebook Messenger standalone chat app is one of the most popular mobile messenger apps
`worldwide.
`Rather than achieving market dominance through fair competition and
`2.
`innovation, Facebook reached its status through a systematic pattern of anticompetitive
`conduct. Facebook repeatedly misled its consumers about the privacy protections it
`provided for its users’ data and leveraged its dominant market power to “acquire, copy or
`kill” any actual or potential competitors.
`Instead of paying money to use Facebook, users exchange their time, attention, and
`3.
`personal data, for access to Facebook’s services. Facebook’s business is focused on selling its users’
`information and attention, in quantifiable units, for money. In other words, Facebook profits by
`selling targeted ads based on the rich set of data about users’ activities, interests, and affiliations.
`
`- 2 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 3 of 75
`
`
`
`
`
`Facebook collected over $70 billion in revenue in 2019,1 almost all of which was for selling
`companies the opportunity to display targeted ads to Facebook’s users.
` Recognizing the utmost importance early on, Facebook promised stringent privacy
`4.
`protection in its efforts to win the race for market dominance. Due to these promises, many users
`ultimately chose Facebook over other competitors. When users sign up for a Facebook account,
`they agree to certain terms. As Part of Facebook’s Terms of Service, users give Facebook
`“[p]ermission to use [their] name, profile picture, and information about your actions with ads and
`sponsored content.” The Terms also state that protecting user “privacy is central to how we have
`designed our ad system.” Essentially, users provide personal information in exchange for access to
`Facebook’s social media network and for a commitment from Facebook to protect user privacy
`while agreeing to receive targeted advertisements on the Facebook platform.
`5. Despite Facebook’s claims about protecting user privacy, it concealed both the actual
`scope of the data it collected from its users and the ways in which it used that data to eliminate
`competition. Through these deceptions, Facebook eliminated potential competition from other
`social media firms and was able to gain and illegally maintain its control over the Social Network.
`Far from being trivial, the data Facebook collects from its users has enormous
`6.
`economic value. A recent majority staff report from the United States House of Representatives
`Antitrust Subcommittee explained that “[o]nline platforms rarely charge consumers a monetary
`price—products appear to be ‘free’ but are monetized through people’s attention or with their
`data.”2 In public filings, Facebook describes its massive advertising earnings in terms of average
`revenue per user (“ARPU”). In the final quarter of 2019, Facebook’s ARPU was $41.41 per user in
`
`
`1 Investigation of Competition in Digital Markets, Majority Staff Report and Recommendations,
`Subcommittee on Antitrust, Commercial and Administrative Law of the Committee on the
`Judiciary, at 170 (“House Report”), Oct. 6, 2020, available at
`https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf.
`2 See House Report at 18.
`
`- 3 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 4 of 75
`
`
`
`
`
`the United States and Canada.3
`7. With so much value at stake, for fear of losing its market dominance to new
`competitors and innovations, Facebook engaged in an illegal pattern of conduct including an
`“acquire, copy, or kill” strategy which, while extremely successful for Facebook, has been very
`detrimental to users. Facebook’s anticompetitive scheme has drastically lessened, if not eliminated,
`competition and harmed users. Facebook founder and CEO Mark Zuckerberg observed, “[o]ne
`thing about startups though is you can often acquire them,”4 reflecting his understanding that such
`acquisitions would enable Facebook to shield itself from competition.
`Rather than competing on the merits of its products, Facebook misuses valuable user
`8.
`data to identify and eliminate emerging competitors. Using its dominant power, Facebook
`discriminatorily shut off emerging competitors’ access to Facebook’s valuable user data if they
`refused to sell their businesses to Facebook. Two of Facebook’s largest acquisitions, the mobile
`social photo app Instagram, and the mobile messaging service WhatsApp, are examples of
`Facebook executing its plan. Each posed a unique and dire threat to Facebook’s monopoly, each
`had enormous and rapidly growing user networks, and each was well positioned to encroach on
`Facebook’s dominant market position.
`Consumers have suffered substantial economic injury as a result of Facebook’s
`9.
`destruction of competition. If Facebook had to contend with rivals, fair competition would have
`required Facebook to provide consumers greater value in return for their data, but Facebook instead
`took that data without providing adequate compensation. Through its deception and the acquisitions
`enabled by its deception, Facebook prevented competition on the merits, and as a result of that
`reduction in competition, users received less value for their data than they would have otherwise
`
`
`3 Facebook Q4 2019 Results at 4, available at
`https://s21.q4cdn.com/399680738/files/doc_financials/2019/q4/Q4-2019-Earnings-Presentation-
`_final.pdf.
`4 House Report at 153.
`
`- 4 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 5 of 75
`
`
`
`
`
`received.
`10. Facebook’s acquisition and maintenance of monopoly power continues to harm
`consumers. Prior to Facebook’s consolidation of the social media competitors that may threaten the
`Social Network Market, several firms vigorously competed to win over consumers by offering
`competing products which differed in quality and other non-price attributes. Early social media
`companies, including Facebook, competed for market share by offering privacy features to
`consumer alongside their competing products. Absent Facebook’s anticompetitive scheme, which
`has allowed Facebook to place consumers under its monopolistic thumb, competition from
`Facebook’s rivals would require Facebook to offer products of quality superior to those it thrusts
`upon consumers today. Instead, Facebook’s anticompetitive conduct has allowed Facebook to
`artificially stifle innovation and deprive consumers of any meaningful alternative to Facebook’s
`social media empire. As such, consumers are faced with a “take it or leave it choice” that provides
`no choice at all: accept a Facebook of lesser quality or forgo use of the only social media platform
`used by most consumers’ friends and family members.
` Facebook’s monopolistic conduct violates the antitrust laws and harms consumers.
`11.
`Facebook is dominant in the Social Network Market and has engaged in predatory and exclusionary
`conduct in order to monopolize, causing Plaintiff and Class members to suffer substantial economic
`injury as a result of Facebook’s competition-reducing violations of law. This action seeks recovery
`for consumers’ losses and Facebook’s unlawful gains, and it seeks other appropriate equitable relief
`to prevent Facebook from continuing to destroy competition and harm consumers.
`JURISDICTION, VENUE, AND CHOICE OF LAW
`12. This action arises under Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2, and
`Section 4 of the Clayton Act, 15 U.S.C. § 15. The action seeks to recover treble damages or
`disgorgement of profits, interest, costs of suit, equitable relief, and reasonable attorneys’ fees for
`damages to Plaintiff and members of the Class resulting from Defendant’s restraints of trade and
`monopolization of the Social Network Market described herein.
`
`- 5 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 6 of 75
`
`
`
`
`
`
`13. This Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 (federal question),
`1332 (class action diversity jurisdiction, and 1337(a)(antitrust); and under 15 U.S.C. § 15 (antitrust).
`The Court also has subject matter jurisdiction over the state law unjust enrichment claims presented
`in this action under 28 U.S.C. 1367 (supplemental jurisdiction).
`14. This Court has personal jurisdiction over Facebook because it is subject to general
`jurisdiction in the State of California, where it maintains its headquarters and its principal place of
`business, and Facebook’s Terms provide that consumers must bring these claims in this Court. The
`scheme to monopolize alleged in this Complaint caused injury to persons throughout the United
`States, including in this District. Moreover, Facebook also conducted substantial business from
`which the claims in this case arise in California and has agreed to personal jurisdiction in this Court.
`15. Venue is appropriate in this District under 15 U.S.C. § 15(a) (Clayton Act), 15 U.S.C.
`§ 22 (nationwide venue for antitrust matters), and 28 U.S.C. § 1391(b) (general venue provision).
`Facebook transacts business within this District, and it transacts its affairs and carries out interstate
`trade and commerce, in substantial part, in this District.
`16. Facebook’s “Terms of Service” provide that “the laws of the State of California,”
`which includes the federal antitrust laws, govern the Terms and “any claim” between Facebook and
`its users.5
`
`INTRADISTRICT ASSIGNMENT
`17. Under Civil Local Rule 3-2(c) and (e), this action is properly assigned to the San Jose
`Division of this District because Facebook is headquartered here, and a substantial part of the events
`or omissions that give rise to the claim occurred in San Mateo County.
`PARTIES
`
`Plaintiff
`
`
`5 Facebook, Terms of Service, https://www.facebook.com/terms.php (last accessed Feb. 11, 2021).
`
`
`- 6 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 7 of 75
`
`
`
`
`
`
`18. Plaintiff Joe Kovacevich is a natural person and citizen of the State of Wisconsin.
`Plaintiff created a Facebook account in approximately 2008, maintains an active account, and
`regularly uses Facebook. Plaintiff actively uses the Facebook Messenger feature and also maintains
`and uses a WhatsApp account.
`Defendant
`19. Defendant Facebook is a Delaware corporation with its principal place of business
`located in Menlo Park, California.
`20. Facebook is a social media company that provides online services to more than 3.14
`billion users. Facebook owns and operates several business divisions, including:
`
`•
`
`•
`
`Facebook. Facebook’s core social media application, which bears the company’s
`name, is, according to Facebook’s filings with shareholders, designed to “enable
`people to connect, share, discover, and communicate with each other on mobile
`devices and personal computers.” The Facebook core product contains a “News
`Feed” that displays an algorithmically-ranked series of content and advertisements
`individualized for each person.
`
`Instagram. Instagram is a social media photo-sharing application that allows users to
`share photos, videos, and messages on mobile devices. Facebook acquired Instagram
`in April 2012.
`
`• Messenger. Facebook’s Messenger application is a multimedia messaging application,
`allowing messages that include photos and videos to be sent from person to person
`across platforms and devices.
`
`• WhatsApp. WhatsApp is a secure messaging application used by individuals and
`businesses. Facebook acquired WhatsApp in 2014.
`In exchange for providing services, Facebook collects user data, which it allows
`21.
`advertisers to use for targeted advertising to Facebook users. Facebook’s principal revenue is from
`targeted social media advertising that it provides to advertisers as a data broker. In 2019, Facebook
`
`- 7 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 8 of 75
`
`
`
`
`
`collected $70.7 billion in revenue, almost entirely from allowing companies to serve ads to its users.
`22. Facebook has over 50,000 employees and offices worldwide.
`
`
`
`FACTUAL ALLEGATIONS
`
`General Background
`Social Media Industry
`23. At a high level, the various participants in the social media industry include the
`following: social media platforms, consumers, advertisers, and content providers (which can be any
`of the previous three types of market participants, or can be third parties).
`24. Social media platforms provide social networking, messaging, and/or media tools to
`consumers “designed to engage people by facilitating sharing, creating, and communicating content
`and information online.”6 Social media platforms typically allow users on their networks to interact
`with people the users know, participate in “groups” which join users with a particular background
`or common interest, and display content.
`25. A common feature of the social media industry is that social media platforms typically
`offer their services to consumers for non-cash consideration.7 In consideration for providing this
`service, social media platforms obtain valuable personal data from their users. The extent of the
`information obtained from users varies by social media platform, as does the disclosures about what
`data is obtained and the use(s) to which it is subsequently put.
`26. Social media platforms monetize the data they obtain from users by selling the data to
`third parties. As an example, advertisers often pay social media platforms for certain aspects of the
`platform’s user data, in order to learn more about the demographics that are most interested in
`certain products. Advertisers, product manufacturers, and service providers also often pay a social
`
`
`
`6 House Report, supra, at 88.
`7 House Report, supra, at 88.
`
`
`
`
`- 8 -
`CLASS ACTION COMPLAINT
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 9 of 75
`
`
`
`
`
`media platform to direct curated ads specifically towards particular user segments. Similarly,
`application developers (“app developers”) purchase users’ data from social media platforms to
`attract users that, in turn, brings profit to the developers in the forms of application purchases and
`ad-revenue.
`
`Facebook
`27. Facebook began as a website that allowed college students to connect with their
`friends on campus. Today, through its website (www.facebook.com) and smartphone
`application(“app”), Facebook has grown into the largest social media platform in the world.
`Facebook’s core offering to consumers is access to its social media network, which contains the
`individualized profiles of well over 200 million users in the United States and billions of users
`worldwide. In exchange for access to the only social media network that allows consumers to
`connect online with most of their family, friends, and acquaintances, Facebook requires users to
`provide their personal data and receive targeted advertisements.
`28. The personal data and user attention that Facebook obtains from consumers in this
`exchange is not just the users’ consideration paid to use Facebook products; they are what provides
`significant monetary value to Facebook’s enterprise. Facebook uses the data obtained from its
`massive user base to generate its largest source of income: selling targeted advertisements to its
`users.
`
`29. Facebook’s machine learning algorithms mine patterns in the data for advertisers,
`which allows advertisers to reach precisely the right audience to convert into sales, user signups, or
`the generation of sales leads. To protect its exclusive control over user data and attention, Facebook
`has brought legal action against actors that have copied publicly available user data and made it
`available outside of Facebook.8
`
`
`8 Facebook brought one such suit as recently as November 19, 2020. See Jessica Romero,
`Combating Clone Sites, Facebook Newsroom, Nov. 19, 2020, available at
`https://about.fb.com/news/2020/11/combating-clone-sites/.
`- 9 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 10 of 75
`
`
`
`
`
`
`30. The data is also monetized by commercializing access—for example, by providing
`application developers, content generators, and advertisers with direct access to the information
`embedded in Facebook’s network, such as the interconnection between users, user attributes, and
`user behavior. That data can then be mined by these third parties.
`31. Prior to founding Facebook, Mark Zuckerberg learned the importance of privacy to
`consumer preference early on. While a student at Harvard University, Mr. Zuckerberg created
`“Facemash,” which “juxtaposed the pictures of two random Harvard undergraduates and asked
`users to judge their physical attractiveness.”9 Notably, Facemash obtained the students’ photos
`without their permission, “dr[a]w[ing] the ire of students and administrators alike[.]”10 While
`promoting “thefacebook.com,” Facebook’s predecessor, Zuckerberg vowed that he had learned
`from his experience with Facemash building into “thefacebook.com” “intensive privacy options,”
`which “he hoped would help to restore his reputation[.]”11 In reality, thefacebook.com’s—and later
`Facebook’s—representations regarding privacy were part of an orchestrated scheme, designed to
`secure and prolong its monopoly status.
`32. From the beginning, Facebook has sought to entice consumers based on its supposed
`commitment to maintaining the privacy of its users’ data. Unlike earlier competing social media
`platforms that allowed anyone interested to join anonymously or by using unverified usernames,
`Facebook required that those interested in joining to use their real-world identities.
`33. This qualitative distinction had clear privacy implications. Ironically, early platforms
`that allowed users to register anonymously or with pseudonyms caused more privacy problems for
`
`
`9 Alan J. Tabak, Hundreds Register for New Facebook Website, The Harvard Crimson, Feb.
`9, 2004, available at https://www.thecrimson.com/article/2004/2/9/hundreds-register-for-new-
`facebook-website/.
`10 Id.
`11 Id.
`
`- 10 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 11 of 75
`
`
`
`
`
`users because wrongdoers that obtained and/or used fellow users’ personal information could hide
`behind their online (anonymous or unverified) identities.
`In contrast, Facebook claimed that it created a level of accountability, because users
`34.
`ostensibly knew who was on the other side of the screen from them and were connected to them in
`some way in real life. Indeed, Facebook’s website “was one of the first social networks where users
`actually identified themselves using their real names.”12 By making users “real,” Facebook claimed
`(and users agreed by voting with their feet) that their social interactions online were better protected
`and more meaningful. But all of this required Facebook to promise privacy protection in order to
`induce users to provide their real-world identities and data.
`At first, Facebook was closed to all but those users who could validate their own
`35.
`real-world identities, such as by verifying that he or she was legitimate via an e-mail address issued
`by an organization, such as a university or a firm:13
`It was this “realness” that became Facebook’s distinguishing feature—bringing along
`with it – and also depending on – a perceived degree of safety and comfort that
`enabled Facebook to become a true social utility and build out a solid social graph
`consisting of verified relationships. Since “friending” (which is a link between nodes
`in the social graph) required both users to approve the relationship, the network
`fostered an incredible amount of trust. Today, many Facebook users post their cell
`phone numbers and their birthdays, offer personal photos, and otherwise share
`information they’d never do outside their circle of friends.
`
`The data Facebook has since collected derives much of its value from the ability to
`36.
`identify Facebook’s users by their real-world identity. Other platforms, such as Twitter, have only
`loosely enforced identity rules, and have never required users to disclose granular details about
`themselves.
`
`
`12 See John Gallaugher, Getting the Most Out of Information Systems § 8.3, available at
`https://2012books.lardbucket.org/books/getting-the-most-out-of-information-systems-v1.4/s12-
`facebook-building-a-business-f.html.
`13 Gallaugher, supra, § 8.3.
`
`- 11 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 12 of 75
`
`
`
`
`
`
`Facebook characterizes each user’s disclosure of his or her identity as increasing the
`37.
`value of the experience for all users, who are purportedly able to benefit from others’ disclosures by
`connecting with and following the activities of their real-world connections.14 Disclosure also
`increases the market value of the information Facebook obtains from its users. Knowing the internet
`habits of “YankeesFan123” is less valuable than knowing the browsing habits of a specific
`individual whose love of the Yankees can be linked with information about his shopping habits,
`income, family, friends, travel, dining, dating, and a myriad of other data points.
`In the years since its inception, Facebook has tracked trillions of data points about
`38.
`consumers with a powerful data structure that it calls the “social graph.” The social graph concept
`“refers to Facebook’s ability to collect, express, and leverage the connections between the site’s
`users, or as some describe it, ‘the global mapping of everyone and how they’re related.’”15 All of
`the data on Facebook can be thought of as a “node” or “endpoint” that is connected to other data on
`Facebook:
`You’re connected to other users (your friends), photos about you are tagged,
`comments you’ve posted carry your name, you’re a member of groups, you’re
`connected to applications you’ve installed—Facebook links them all.16
`Given Facebook’s size and reach, as well as the extent of its surreptitious user data
`39.
`collection (discussed further below) the social graph is a unique and uniquely valuable dataset, even
`among the giants of the tech world. Much of this value stems from the fact that the majority of
`
`
`14 Apple’s Senior Director for Global Privacy recently expressed skepticism that social media
`platforms such as Facebook encourage disclosure of personal information solely to create a richer
`“personalized experience” for other users. See Apple Privacy Letter, Nov. 19, 2020, available at
`https://www.scribd.com/document/485006035/Apple-Privacy-Letter#from_embed (“What some
`companies call ‘personalized experiences’ are often veiled attempt to gather as much data as
`possible about individuals, build extensive profiles on them, and then monetize those profiles.”).
`15 Gallaugher, supra, (quoting Alex Iskold, Social Graph: Concepts and Issues, ReadWriteWeb,
`Sept. 11, 2007, available at https://readwrite.com/2007/09/11/social_graph_concepts_and_issues/).
`16 Id. (citing Alan Zeichick, How Facebook Works, MIT Technology Review, June 23, 2008,
`available at https://www.technologyreview.com/2008/06/23/219803/how-facebook-works/).
`- 12 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 13 of 75
`
`
`
`
`
`Facebook’s social graph cannot be viewed by the public or search engines, and because it contains
`extraordinary amounts of data that users unwittingly provided Facebook regarding their most
`minute everyday habits.
`Facebook is a so-called “walled garden”—a closed ecosystem run by a single
`40.
`operator. Advertisers must go through Facebook in order to reach Facebook users. And Facebook
`can decide how much of its social graph it allows app developers, including competitors, to access.
`The personal data of Facebook’s users takes many forms including data about the
`41.
`information users share on their personal profile pages, the photos and profiles users have viewed,
`what information users share with others, and even what users put in messages to other users. This
`granular data all allows targeted advertising on a scale that has never before existed. Facebook’s
`platform allows advertisers to target Facebook’s user base by their attributes and behavior. Third
`party advertisers have been able to use Facebook’s advertising platform to track and target
`consumers all throughout the internet, even when Facebook users are “logged-out” of Facebook.
`Relevant Market
`The Social Network Market
`The Social Network Market is the product market consisting of social networks,
`42.
`which are websites (and accompanying mobile applications) that: (1) facilitate users of a given
`network finding, interacting, and networking with other people either whom the users already have
`a personal connection to or to whom they are connected through others they already know online;
`and (2) provide users with additional substantive features beyond the ability to communicate with
`other users and share multimedia.
`The personal social networking service has three key elements: they (1) are built on a
`43.
`social graph that maps the connections between users and their friends, family, and other personal
`connections; (2) include features that many users regularly employ to interact with personal
`connections and share their personal experiences in a shared social space, including in a one-to-
`many “broadcast” format of personal multimedia content such as news feed posts, photos, videos,
`
`- 13 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 14 of 75
`
`
`
`
`
`etc.; and (3) include features that allow users to find and connect with other users, to make it easier
`for each user to build and expand their set of personal connections.
`Search engines, such as Google, Yahoo, or Bing, are not “social networks” because
`44.
`they do not provide for interaction between platform members. Similarly, apps like Apple’s
`“iMessage,” which simply allow the sharing of messaging media, such as emails or text messages,
`are not social networks because, although they provide for interaction, they do so only in a device-
`to-device manner and focus solely on delivering messages rather than facilitating a broader online
`social experience. Facebook itself has noted this distinction, explaining in documents provided to
`the House Antitrust Subcommittee that whereas the growth of Apple’s iMessage is “limited by the
`adoption of iPhones, . . . Facebook’s products can be used across devices.”17
`Still other types of online networks, such as LinkedIn, are not “social networks,” as
`45.
`that term is defined in this complaint, because they are used for a different purpose, and are used in
`parallel to—rather than instead of—Social Networks. Whereas LinkedIn is typically considered the
`dominant professional social network in the world, it is not a replacement for Facebook. This is
`because LinkedIn is used primarily for professional networking and employment-seeking purposes,
`while Facebook and its like are used primarily for non-professional, personal purposes.18 The
`European Commission explained this distinction during its review of the Microsoft/LinkedIn
`merger: “the reasons for using a [professional service network] are different from those for using a
`personal social network. While the former is used to ‘1. Maintain professional identity, 2. Make
`useful contacts, 3. Search for opportunities, 4. Stay in touch’, the latter is used to ‘1. Socialize, 2.
`
`
`17 House Report, supra, at 136 n.752.
`18 Facebook has itself recognized this distinction in documents it provided to the House Antitrust
`Subcommittee. See id. at 133–34 n.733 (“Linkedin . . . coexist[s] in the US with similar user bases
`but orthogonal graphs: Facebook connects friends and family, LinkedIn connects coworkers[.]”)
`- 14 -
`CLASS ACTION COMPLAINT
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`

`

`Case 5:21-cv-01117 Document 1 Filed 02/15/21 Page 15 of 75
`
`
`
`
`
`Stay in touch, 3. Be entertained, 4. Kill time’.”19 Thus, users will have both a LinkedIn and
`Facebook account, not one or the other, and this other type of network is not viewed or treated as a
`substitute for a Social Network.20
`There are no reasonable substitutes for personal Social Networks. Social media
`46.
`platforms, such as YouTube and TikTok, primarily exist to allow users to stream, share, and view
`content which overlaps with the significant social media element of personal Social Network.
`However, it lacks the element of an online community that brings together users who specifically
`choose to associate with one another. In addition, Social Networks, such as Facebook, provide a
`“rich social experience” to users through specific product features.21 Social media platforms, like
`YouTube and TikTok, do not provide or facilitate a similar use and instead offer only limited
`opportunities for social interaction, or interaction of a very different type that complements, rather
`than substitutes, for a social networking experience.
`Beyond the “rich social experience” that Social Networks provide to users,
`47

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket