A just-surfaced class-action antitrust suit filed by adverting customers against Facebook parent company Meta accused the social network operator of tanking its own streaming platform, Watch, just to appease one of its biggest advertising clients.
The complaint accuses Meta of being way too tight with Netflix co-founder and former CEO Reed Hastings, who sat on the Facebook board from 2011-2019. The plaintiffs also say that Netflix, which upped its yearly spend with Facebook from $150 million - $200 million in 2019, when it was also provided with user analytics, received access to the private direct messages of Facebook users.
Facebook finally turned the lights out on Watch back in April of last year, when it shuttered Jada Pinkett Smith talk show Red Table Talk, the last of a somewhat ambitious flurry of original shows launched by the platform starting in 2017.
That same month, the class-action plaintiffs filed a letter, accusing Meta and Facebook of anticompetitive practices. That year-old letter was obtained and reported on last week by Gizmodo.
"For nearly a decade, Netflix and Facebook enjoyed a special relationship," the letter states. "Netflix bought hundreds of millions of dollars in Facebook ads; entered into a series of agreements sharing data with Facebook; received bespoke access to private Facebook APIs; and agreed to custom partnerships and integrations that helped supercharge Facebook’s ad targeting and ranking models. It is no great mystery how this close partnership developed, and who was its steward: from 2011- 2019, Netflix’s then-CEO Hastings sat on Facebook’s board and personally directed the companies’ relationship, from advertising spend, to data-sharing agreements, to communications about and negotiations to end competition in streaming video. Hastings directly communicated with Facebook executives, principally Mark Zuckerberg and Sheryl Sandberg, to do so."
In November 2018, Next TV sibling publication Multichannel News examined what appeared to be an ambitious effort by Facebook to join the streaming wars. But according to the lawsuit, Facebook founder and chief Zuckerberg had already pulled the plug the previous spring, personally emailing Watch head Fidji Simo to tell her the Watch budget was being trimmed by $750 million.
The suit references a 2017 Recode conference appearance by Hastings. When asked about video competition with Facebook, he responded, "There's not a big conflict yet."
Hastings later discussed this response over email with Zuckerberg, the plaintiffs added, indicating the two captains of video industry were concerned about their competitive juxtaposition.
