The U.S. District Court for the District of Columbia should require the deposition of two venture capitalists who have direct knowledge of the competitive aspects of Meta’s purchase of Instagram and WhatsApp, the FTC said Monday in a filing in docket 1:20-cv-03590 (see 2210270074). The agency is seeking the depositions of Roelof Botha and Jim Goetz. Botha heads Sequoia Capital, which the filing describes as the “only venture capital firm that invested in both Instagram and WhatsApp.” Goetz is a former member of WhatsApp’s board of directors and a retired Sequoia partner. Botha was lead investor in Instagram’s Series B funding, and Goetz led at “least three rounds of investment in WhatsApp and helped negotiate WhatsApp’s eventual acquisition by Meta,” the agency said. Sequoia filed to quash both deposition requests, which the FTC asked the court to reject and instruct deposition before year-end. Their “personal involvement in and knowledge of Instagram and WhatsApp respectively prior to Meta acquiring both companies are plainly relevant to the FTC’s claims that Meta acquired Instagram and WhatsApp to eliminate competitive threats that emerged during the shift from desktop to mobile,” the FTC said, arguing the depositions would require “minimal burden” for the two. The agency is seeking information that isn’t relevant to any “issues, claims, or defenses in this antitrust litigation, and is cumulative of other information the FTC already possesses,” Sequoia said. “Moreover, deposing Sequoia’s top executive and its former senior executive on topics more than a decade old is unduly burdensome and not proportional to the needs of this case.” Sequoia said it has fulfilled legal obligations to respond to discovery requests in the case, and the agency is engaging in a “fishing expedition” at the expense of nonparties who have nothing to do with the case.
U.S. Magistrate Judge Virginia DeMarchi for Northern California in San Jose denied Meta’s motion to compel discovery from Apple, said her Friday order (docket 5:22-cv-04325). The court accepts Meta’s “characterization” that the discovery it seeks from non-party Apple’s competitive ambitions in the virtual-reality fitness app landscape “is highly relevant to its defenses” in the FTC’s lawsuit to block Meta’s Within Unlimited buy on antitrust grounds, said DeMarchi. But the court “is not persuaded that Meta requires the relief it seeks here in order to fully explore in deposition the information it believes is critical to its defenses,” she said. Meta’s main concern is that because Apple is a competitor, “its review and selection of documents for production will be colored by competitive bias, even if its counsel endeavor to conduct the review and production in good faith,” said the order. For this reason, Meta says, the proposed “custodial searches” it seeks in discovery are necessary to provide an objective check on Apple’s production of witnesses and documents, it said. But the court is “skeptical of the premise that Apple’s status as Meta’s competitor necessarily implies that Apple’s counsel and the company representatives working with counsel cannot be relied upon to comply with their discovery obligations,” said the order. “That premise finds no support in the case law” before the court, and Meta “points to no other facts or circumstances” indicating that an objective check on Apple’s production “is warranted here,” it said.
U.S. District Judge Edward Davila for Northern California in San Jose should “maintain under seal” 10 portions of the FTC’s amended complaint to block Meta’s Within Unlimited buy to protect sensitive business information, said Meta in a statement of support Thursday (docket 5:22-cv-04325) for keeping the redactions. Meta’s proposal “significantly narrows the information that would be maintained under seal,” it said. The proposed redactions “reflect Meta’s good-faith effort to seek sealing of only that information which is competitively sensitive, contained in internal documents only, and cannot be protected from public disclosure through any more restrictive means,” it said. They involve statements of “internal strategy” and quotations on purchase pricing in “prior non-public acquisitions,” plus financial data “not required to be publicly disclosed,” it said.
Google “took reasonable steps” to “preserve” all relevant user chat information in Utah’s multistate antitrust lawsuit against Google’s app store, the platform argued Thursday in 3:21-cv-05227 before the U.S. District Court for the Northern District of California (see 2204010037). Google asked the court to deny the states’ request for a sanction in the form of an adverse inference instruction. The states have failed to demonstrate they “suffered any prejudice” and failed to show Google intended to “deprive” the plaintiffs of data and information. Google argued it “fully complied” with discovery obligations, including the preservation of relevant chats and the issuing of "litigation hold notices regarding chat preservation and automatically preserving certain categories of chats.”
U.S. Magistrate Judge Virginia DeMarchi for Northern California in San Jose scheduled an in-person hearing for Wednesday at 10 a.m. PDT on Meta’s Oct. 26 motion to compel discovery from non-party Apple, according to a text-only entry Saturday in docket 5:22-cv-04325. Meta served a subpoena on Apple for deposition testimony and production of certain documents said Meta’s motion. “While Apple has generally agreed to produce documents responsive to Meta's subpoena, it has refused to conduct the limited custodial searches that Meta has requested relating to several critical topics. Apple's objections based on over breadth, undue burden, proportionality, and relevance are meritless.” The discovery Meta seeks from Apple “is highly relevant” to Meta’s defense of the FTC’s lawsuit to block Meta’s Within Unlimited buy for antitrust reasons, said Meta.
The FTC’s amended complaint to block Meta’s Within Unlimited buy “sufficiently pleads that the proposed acquisition may substantially lessen competition,” said the agency’s response Thursday (docket 5:22-cv-04325) in opposition to Meta’s Oct. 13 motion to dismiss the case. Meta’s assertion that the FTC “has not alleged facts sufficient to support a claim” based on theories of anticompetitive harm in the long history of antitrust case law “ignores the statutory authority under which the FTC proceeds in this matter,” it said. The FTC brought the case “to obtain interim, injunctive relief to preserve the status quo to protect the Commission’s ability to conduct its administrative adjudicatory proceeding on the merits,” it said. “The ultimate merits issue as to which the FTC must raise substantial questions is not whether the acquisition will substantially lessen competition” but whether there is a reasonable probability of anticompetitive effect from the acquisition, it said. “The FTC has done just that with respect to its allegations of harm to actual potential competition and perceived potential competition.” Meta’s arguments to the contrary “ignore the FTC’s burden, and instead discuss (or invent) issues relevant to the ultimate merits of claims brought directly under Section 7 of the Clayton Act,” it said.
Meta’s request that Snap produce certain documents in the FTC’s lawsuit is an “enormous” burden that would require the disclosure of competitively sensitive documents with marginal relevance in the case, Snap said in a filing Thursday in 1:20-cv-03590 before the U.S. District Court for the District of Columbia. Some of Meta’s demands are massively overbroad and designed to sweep in plainly irrelevant, yet highly sensitive, material,” Snap said of Meta’s request for 46 numbered requests with 150 sub-portions. Snap asked the court to require the production of highly sensitive documents with an “outside counsel eyes’ only” designation and order Meta to pay Snap’s compliance costs. The documents are necessary for Meta to show the “significant” competition from Snap, Meta said in its own filing, accusing Snap of “stonewalling and delaying.” Meta criticized Snap’s first attempt to block all document production before offering a “take-it-or-leave-it” offer to produce a handful of documents with numerous, inappropriate conditions. Meta asked the court to order Snap to produce “highly relevant” documents.
Meta moved Wednesday for an order to compel the FTC to sit for a deposition in the agency’s lawsuit to block Meta’s Within Unlimited buy. “The FTC has taken the extreme position of refusing to produce any representative for a Rule 30(b)(6) deposition on the FTC’s product market and competitive effects allegations, as well as on issues of agency bias that infect this lawsuit,” said Meta in a joint statement with the FTC (docket 5:22-cv-04325) in U.S. District Court for Northern California in San Jose on the status of their deposition dispute. The mention of agency bias refers to Meta’s efforts to seek the recusal of FTC Chair Lina Khan. “The FTC’s objections are not supported by law,” and they “substantially prejudice” Meta “in this expedited proceeding where there is no legitimate basis for the FTC to continue withholding highly relevant information at the close of fact discovery,” said the company. The FTC countered that having previously issued a “facially overbroad and otherwise defective” deposition notice covering 31 topics, Meta issued an amended notice on Oct. 19, a week before the close of fact discovery. The amended notice “suffers from the same defects” as the original because it “impermissibly” seeks to depose FTC attorneys on “privileged matters,” and because it seeks testimony that is “unreasonably” duplicative of information that’s already in Meta’s possession.
The FTC is backing Meta’s Oct. 17 administrative motion to keep under seal the materials the agency designated as confidential in a joint statement of recent decision that same day alerting the court that Meta’s petition for the recusal of FTC Chair Lina Khan in the agency’s review of Meta’s Within Unlimited buy is pending before the commission. Now under “provisional seal” are “specified portions” of the joint statement, the entirety of Exhibit B to the joint statement and two lines from the declaration accompanying the joint statement that describe the contents of Exhibit B, said the FTC. There is “good cause” to keep the information confidential, said the FTC Monday in a statement of support (docket 5:22-cv-04325) in U.S. District Court for Northern California in San Jose. “The public interest weighs heavily in favor of keeping the material at issue under seal” because it is covered by an FTC protective order and confidentiality rules in a “pending administrative case,” it said. “The FTC’s administrative confidentiality procedures warrant deference,” it said. The commission will “suffer injury” if the sealing request is denied, it said. “A less restrictive alternative to sealing would not be sufficient, because it would result in public release of information that is protected by the deliberative process privilege,” it said.
Plaintiffs in the antitrust class action to overturn T-Mobile's buy of Sprint “hammered out an agreement in principle” with T-Mobile to begin “some limited foundational discovery” in the case, plaintiffs’ attorney Brendan Glackin of Lieff Cabraser told U.S. District Judge Thomas Durkin in Northern Illinois in a telephonic status hearing Friday. Seven AT&T and Verizon customers brought the class action, saying the transaction caused their rates to skyrocket through reduced competition in the wireless space. Durkin on Oct. 7 denied T-Mobile’s motion to transfer the case to the Southern District of New York, where U.S. District Judge Victor Marrero wrote the early-2020 opinion that enabled the deal to go forward (see 2210110003). The case has been somewhat in limbo as the plaintiffs work to serve court papers on a foreign defendant, Deutsche Telekom, through “diplomatic channels,” said Glackin. He still anticipates the process will be complete by January, he said. Durkin asked the parties to file a joint motion summarizing their agreement to proceed with limited discovery. T-Mobile attorney Rachel Brass of Gibson Dunn said her client will withdraw as “moot” its pending motion to stay the case, pending service on overseas defendants, as soon as Durkin accepts the joint motion. The judge set the next telephonic status hearing for Jan. 27.