Facebook Gets Hit With Anticompetitive Lawsuit By App Developer

Facebook got hit with a lawsuit in California that accuses the company of engaging in anticompetitive behavior with tens of thousands of developers.

The Financial Times, citing the lawsuit filed in California by app developer Six4Three, reported the suit contends that Facebook’s Chief Executive Mark Zuckerberg and other senior executives “weaponized” the data of users to have a foothold on its rivals from 2012 through 2015. Six4Three contends there are confidential emails that provides evidence that it wants the court to release. In July a judge will rule on whether to unseal the emails, noted the report.

According to the lawsuit, Facebook allegedly threatened to close developers’ access to data unless they purchased large amounts of ads, agreed to be sold to Facebook below market value, transferred intellectual property to the social media company and fed its data back to Facebook. The developer contends it could never launch a complete version of Pikinis, an app that searches through Facebook users’ friends to locate pictures of them in bathing suits, because Facebook shutoff access to the data. The app developer is claiming damages due to a breach of contract and the loss of investment and time it spent developing the app. The lawsuit, which was first launched in 2015, covers the time frame between 2012 and 2015.

Facebook denied the allegations, saying in a statement to the Financial Times that “When we changed our policy in 2015, we gave all third-party developers ample notice of material platform changes that could have impacted their application.” It said it tried to work with Six4Three but that the developer declined any suggestions made by Facebook. It said it is false that it treated app developers better because they purchased advertising.

In the lawsuit, the plaintiff claims that a decline in shares of Facebook after it went public in May of 2012 prompted the company to launch the scam aimed at getting things out of the app developers.  “Zuckerberg personally lost approximately $10bn in the period during which he decided to implement the fraudulent and anti-competitive schemes,” the complaint alleged, according to the Financial Times. “After Zuckerberg decided upon and implemented the alleged fraudulent and anti-competitive schemes, the downward trajectory of Facebook’s stock reversed course and began its rapid climb.” According to the lawsuit, Facebook wanted to remove any competitive threat to planned products and it wanted to boost its mobile advertising business by “holding software companies hostage.” It went on to contend that Zuckerberg made up that narrative that the company was closing down data to apps that rarely used the data or had somehow violated the trust of users. In a court submission, Facebook said:  “Six4Three is taking its fifth shot at an ever-expanding set of claims and all of its claims turn on one decision, which is absolutely protected: Facebook’s editorial decision to stop publishing certain user-generated content via its platform to third-party app developers,” reported the FT.