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Lawsuit Alleges Facebook Surveilled and Targeted Rivals

Lawsuit Alleges Facebook Surveilled and Targeted Rivals

Facebook attempted to stifle competition and use its market power to do so, according to a class action lawsuit filed by four developers on January 16, 2020, the Verge reported. And the plaintiffs are trying to force Facebook founder and CEO Mark Zuckerberg to sell his controlling shares in the company, according to CBS MoneyWatch.

On page 56 of the complaint, published in a PDF file on the Vox Media website (parent company of TheVerge.com), the plaintiffs allege Facebook “used mobile spyware on an unprecedented scale to surveil, identify, and eventually remove from the market through acquisition competitors that independently threatened Facebook’s dominance…,” and they allege the following:

“Onavo sold the mobile usage data it collected to Facebook, which in turn used the real-time information it received from Onavo to determine which mobile applications posed a threat to Facebook’s dominance and to the SDBE protecting Facebook from new entrants and competition.

“Facebook used Onavo data to: (a) identify and target competitors from which Facebook could demand Whitelist and Data Sharing Agreements; (b) identify and target competitors to whom Facebook would completely deny Platform access; and (c) identify and target competitors that Facebook would remove from the competitive landscape entirely through acquisition.”

Facebook, in a statement to CBS MoneyWatch, called the case against it “without merit.” The company said it operates in “a competitive environment where people and advertisers have many choices.”

Facebook is also facing trouble on another front. A judge ruled on January 17, 2020, that the company must turn over information to Massachusetts Attorney General Maura Healey, who requested it as part of her investigation started in March 2018 “following revelations that data mining firm Cambridge Analytica used ill-gotten data from millions of Facebook users through an app, then used the data to try to influence U.S. elections,” CBS Boston reported.

Facebook launched its own investigation in March of 2018, and in September of 2019, it wrote on the Facebook blog that its review helped it “to better understand patterns of abuse in order to root out bad actors among developers.”

“It is important to understand that the apps that have been suspended are associated with about 400 developers,” Facebook wrote. “This is not necessarily an indication that these apps were posing a threat to people. Many were not live but were still in their testing phase when we suspended them.”

But the AG said, “Facebook simply telling its users that their data is safe without the facts to back it up does not work for us.”

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.