Antitrust and Unfair Competition Law

E-Briefs, News and Notes: December 2023

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WELCOME to the DECEMBER 2023 edition of E-Briefs, News and Notes.

This edition has a variety of content:

  • In SECTION NEWS, we feature:
    • MONTHLY SECTION MESSAGES:
      • Coming Attractions: Details for the 2024 UCL Institute to be held on Thursday, January 18 at the City Club Los Angeles!
    • Section Announcements:
      • Save The Date for the Seventh Annual “Celebrating Women in Competition Law in California” on March 7, 2024!
      • The December 2023 edition of the California Antitrust and Unfair Competition Law Treatise is now available! 
      • Applications are due by January 12 for the 2024 Inclusion and Diversity Fellowship Program!
      • Job Postings
  • E-BRIEFS features an interesting mix of three significant recent decisions:
    • First, U.S. District Judge Jacqueline Scott Corley (NDCA) granted summary judgment ending a class of California consumers’ claims against Qualcomm under the Cartwright Act and UCL;  
    • Second, a rare step by the Fourth Circuit reversing a Sherman Act conviction because the indictment failed to state a per se offense; and
    • Third, after outlining the considerable regulatory scrutiny faced by T-Mobile and Sprint pre-merger, Judge Durkin (ND IL) denied T-Mobile’s motion to dismiss but granted SoftBank Group’s motion to dismiss on jurisdictional grounds.
  • ENFORCEMENT AGENCY PRESS RELEASES highlight the enforcement activities of the Antitrust Division, DOJ, FTC, and California AG’s office.  Reading the press release(s) is a quick way to keep on top of major developments.

Thanks to all the contributors to this edition.  If you have any suggestions for improvement, or an interest in contributing to E-Briefs, please contact Editors Betsy Manifold (Manifold@whafh.com) and James Dallal (JDallal@cpmlegal.com).

Section News

Message from the UCL Committee

We are excited to welcome you to the Second Annual UCL Institute on January 18, 2024, at the City Club in Los Angeles. The event will run from 9:00 am to 3:30 pm and offers four hours of MCLE credit (looking at you last-name H-M folks).

Our lineup is dynamite. Sam Levine, FTC Director of the Bureau of Consumer Protection, and Ted Mermin, the Executive Director of Berkeley Law’s Center for Consumer Law and Economic Justice, will hold a lunchtime fireside chat regarding the latest in consumer protection issues as our keynote presentation. Our five panels will cover:

  • UCL and FTC Enforcement Priorities” featuring representatives from the Federal Trade Commission, California Attorney General’s Office, the San Francisco District Attorney’s Office and the San Diego District Attorney’s Office; 
  • Mediating UCL Cases” featuring mediators with experience both on and off the bench;
  • Privacy and the UCL” featuring experienced public enforcers and private practitioners;
  • Epic Reverberations” with two practitioners who filed opposing amicus briefs in the Epic v. Apple case; and
  • Developments in Discovery” featuring an experienced UCL practitioner and discovery special master.

Now is the time to register—last year’s event sold out! We are also offering sponsorship opportunities that include recognition and free tickets. 

We’ve priced the event competitively, with discounts for Section members and government, non-profit, and in-house attorneys and employees. These prices include parking at the event as well as a catered lunch:

  • $40.00 — Members of the Antitrust and Unfair Competition Law Section
  • $50.00 — Non-Section Members
  • $30.00 — Government, Non-Profit, and In-House Employees (Non-Member)
  • $20.00 — Government, Non-Profit, and In-House Employees (Members)

If you are not already a member of the Section, now is a great time to consider joining. You will get a discount and get to be a part of our dedicated group of Antitrust and UCL practitioners.

Registration: To register, click on this link: https://calawyers.org/event/ucl-institute/

Questions: 

For registration information, email ProgramRegistrations@calawyers.org.

For program content and/or Section information, email Antitrust@calawyers.org.

Kyla Gibboney
Kyla Gibboney
Christina Tusan
Christina Tusan

Monthly Section Messages

  • The December 2023 edition of the California Antitrust and Unfair Competition Law Treatise is now available!  All the chapters have been thoroughly reviewed, revised and updated with the latest case law and other relevant legislative developments.  Check out what’s new (https://shorturl.at/gjvI9) or see the whole thing on Lexis (https://lnkd.in/gErnftsj).
  • Applications are due by January 12 for the 2024 Inclusion and Diversity Fellowship Program!  If you know any law students interested in doing antitrust and unfair competition work, please direct them to the webpage.
  • The Seventh Annual “Celebrating Women in Competition Law in California,” will be held on March 7, 2024 from 5:30 pm to 8:00 pm in San Francisco.  More details coming soon!

Job Postings

The U.S. Department of Agriculture is looking for a Chief Competition Officer within the Agricultural Marketing Service (AMS). This new position is designed to enhance the regulatory and enforcement policies and programs that AMS implements in fair and competitive markets, including the Packers & Stockyards Act of 1921, the Federal Seed Act, and more.  The position is located in Washington DC and open for applications through January 2, 2024.  Apply here: https://www.usajobs.gov/job/763701300

e-Briefs

Summary Judgment Granted in In re Qualcomm Antitrust Litigation By John A. Carriel

By John A. Carriel

U.S. District Judge Jacqueline Scott Corley (NDCA) granted summary judgment ending a class of California consumers’ claims against Qualcomm under the Cartwright Act, Cal. Bus. & Prof. Code §§ 16720, 16727, and California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §17200.  In re Qualcomm Antitrust Litig., No. 17-MD-02773-JSC, 2023 WL 6301063, at *1 (N.D. Cal. Sept. 26, 2023).

In their second amended complaint, plaintiffs alleged Qualcomm’s chip supply contracts with cellphone manufacturers—namely Samsung and Apple—required the manufacturers to purchase chips exclusively (or practically exclusively) from Qualcomm, and that such contracts constituted anti-competitive “exclusive deals,” in violation of the Cartwright Act.  According to plaintiffs, in the absence of such requirements, other manufacturers would have been able to compete with Qualcomm, resulting in lower chip manufacturing costs and lower prices for consumers of cell phones and tablets.  Plaintiffs alleged those same chip supply contracts constituted unfair competition under the UCL.

To overcome summary judgment on the Cartwright Act claim, plaintiffs were required to raise genuine disputes of material fact as to: “(1) whether an exclusive deal occurred, (2) whether an exclusive deal caused “significant foreclosure” of the market to competitors, and (3) whether the “significant foreclosure” proximately caused injury to Plaintiffs.”  Id. at *2.  Judge Corley concluded plaintiffs failed to raise a genuine dispute of material fact as to: (1) whether an exclusive deal arrangement existed between Qualcomm and Samsung; and (2) the existence of antitrust injury.

Under California law, whether an exclusive dealing agreement is unlawful under the competition laws is determined under the Rule of Reason.  Due primarily to the fact that, under Qualcomm’s chip supply agreements with Apple, Qualcomm provided “exclusivity payments” to Apple, the Court reasoned plaintiffs succeeded in raising a genuine issue of material fact as to whether Qualcomm’s chip supply contracts with Apple constituted exclusive deals.  Id. at *5.  However, the Court concluded plaintiffs had failed to provide evidence or facts sufficient to create a genuine issue of material fact as to whether Qualcomm’s chip supply agreements with Samsung—which did not require similar exclusivity payments—constituted exclusive dealings.  Accordingly, summary judgment in favor of Qualcomm as relates to the alleged exclusive dealing arrangements with Samsung was granted.  Id. at *6.

With respect to antitrust injury, plaintiffs’ arguments relied heavily on a supplemental expert report dated May 25, 2023.  Plaintiffs’ prior expert report had been premised on a “blended theory of harm—accounting for the relationship between Qualcomm’s patent licensing practices and Qualcomm’s exclusive chip-supply contracts together.”  Id. at *3.  That theory of harm became unviable when the Ninth Circuit rejected it in a parallel case brought against Qualcomm by the Federal Trade Commission.  See FTC v. Qualcomm, 969 F.3d 974 (9th Cir. 2020).  Plaintiffs attempted to remedy this issue by requesting leave to file an updated expert report to “isolate the harm to consumers from just the exclusive chip-supply deals.”  In re Qualcomm Antitrust Litig., 2023 WL 6301063, at *3.  Despite the Court’s denial of this request, plaintiffs filed the May 25, 2023 supplemental expert report “isolating just the effects of Qualcomm’s exclusive dealing arrangements.”  Id.  The supplemental report was rejected as untimely, and because it did not put forth any new theory of antitrust harm regardless.  Id.  As to plaintiffs’ remaining antitrust injury arguments, plaintiffs failed to provide evidence to raise a genuine dispute of “actual antitrust injury via a pass-through from Apple to class members based on the exclusive dealing.”  Id. at *7. 

Lastly, the Court rejected plaintiffs’ requests for injunctive and monetary relief under the UCL.  The request for injunctive relief was rejected as the agreements at issue are no longer in place and plaintiffs provided no evidence supporting their assertion that there was a “‘reasonable probability’ that Qualcomm will agree to—and may have already agreed to—exclusivity agreements with Apple, Samsung, and other major OEMs that continue to impede competition and harm consumers.”  Id.at *8.  As to monetary relief, the Court held that a UCL monetary claim may only be raised where there is not an adequate remedy at law to address the conduct at issue and, here, the plaintiffs had an adequate remedy—the ability to challenge the conduct under the Cartwright Act.

United States v. Brewbaker: Vertical Bid Rigging Liability By Lee Berger and Travis West

By Lee Berger and Travis West

Lee F. Berger
Lee F. Berger
Travis West

In United States v. Brewbaker, the Fourth Circuit took the rare step of reversing a Sherman Act conviction because the indictment failed to state a per se offense.  In doing so, the Fourth Circuit may have inadvertently opened a large loophole for price fixing and bid rigging, making prosecution of such violations much more difficult.

Brewbaker was a sales manager at Contech Engineering Solutions, a manufacturer of corrugated steel and aluminum pipe and plate.  Contech’s distributor and exclusive dealer in North Carolina was Pomona Pipe Products.  Contech and Pomona each bid against each other (along with a third party) for contracts from the North Carolina Department of Transit (“NCDOT”).  Contech’s and Pomona’s bids, though, were intertwined: if Contech won a bid, it relied upon Pomona for the services, while if Pomona won, it relied upon Contech for supplies.  In effect, both sides won if either won the bid.  To set those intertwined bids, Contech and Pomona had to talk to each other to formulate the bid: Pomona needed to know the cost of the aluminum for its bid, while Contech needed to know the cost of Pomona’s services to formulate its bid.  Brewbaker, though, took those communications one step further once he became the sales manager in charge of the bids for NCDOT.  He would ask Pomona not just for its services price but for its total bid price, which he would then add a small percentage to and submit as Contech’s bid, ensuring that Pomona was likely to win the bid.  Although Brewbaker took steps to avoid leaving a paper trail, he was indicted in October 2020 by the FBI and DOJ for bid-rigging – a per se violation of Section 1 of the Sherman Act – and several mail- and wire-fraud violations.

At the trial court level, Contech and Brewbaker challenged the indictment, arguing that the indictment only alleged Contech submitted an additional direct bid that would not undercut its dealer’s price, which should be analyzed under a rule of reason standard.  Additionally, they argued that there was not a horizontal restraint, but a vertical one, which meant that the restraint must be analyzed under the rule of reason.  The district court rejected these arguments and Brewbaker was convicted.

The panel disagreed with the district court’s analysis and held that the indictment should have been dismissed for failure to state a claim.  The panel noted that the Supreme Court has cautioned against too readily classifying violations as per se and has held that vertical restraints are not per se violations.  When the panel analyzed the relationship at issue here, it noted that it was a hybrid horizontal and vertical arrangement, which has not been previously declared to be per se unlawful.  Relying again upon the Supreme Court’s admonition against readily expanding the category of per se liabilities, the panel declined to do so.  It rejected the government’s argument that the only relevant relationship was the part restrained by the agreement, which would have been the horizontal relationship.  The panel held, though, that the broader relationship is important because the economic effects of an agreement may differ based on how the parties relate to one another.  It also held that the government’s rule would require arbitrary line-drawing.  It also rejected analogies to hub-spoke-and-rim conspiracies because in those cases, the vertical entity was not a party to the competitors’ agreement.  It also rejected a bid rigging analogy because bid rigging is purely horizontal. 

The panel then turned to whether the hybrid restraint should be evaluated under a per se or rule of reason standard.  In doing so, it evaluated the arrangement as a dual distribution model which can increase distributive efficiency.  It walked through the economic literature on the pro-competitive and anticompetitive effects of dual distribution, which it saw as evidence that the per se standard could not apply and thus his conviction for the Sherman Act violation had to be vacated.  It held, though, that his convictions for wire and mail fraud were not tainted by the Sherman Act error and could survive. 

The Fourth Circuit has made up a new doctrine where an existing doctrine already applies.  When a horizontal restraint is ancillary to a vertical agreement, the well-established ancillary restraints doctrine is employed to determine whether the horizontal restraint is analyzed under the per se or rule of reason standard.  The ancillary restraints doctrine asks whether (1) the primary agreement is lawful, and, if so, whether (2) the horizontal restraint is reasonably necessary to achieve the primary agreement’s procompetitive effect.  But here the Fourth Circuit has made up a new standard: if conspirators’ relationship is both horizontal and vertical, then the rule of reason applies.  This new rule is not compatible with the ancillary restraints doctrine.  For example, if the vertical agreement between the conspirators also could violate the antitrust laws, then under the ancillary restraints doctrine the horizontal restraint is a per se violation, while under the Fourth Circuit approach, the horizontal restraint is evaluated under the rule of reason.  Or if (as here) the horizontal restraint is not necessary to achieve the procompetitive effect of the vertical agreement, as evidenced by the fact that the companies had provided services to each other for a long time before Brewbacker started fixing the bids, under the ancillary restraints doctrine the bid-rigging would be a per se violation, but under the Fourth Circuit’s rule it would be rule of reason.

The Fourth Circuit gave no reason to set aside the ancillary restraints doctrine, and offers no reason why it needed to invent a new doctrine to address this issue.  The DOJ has already indicated that it will file a petition for rehearing.

T-Mobile Sprint Merger Deal Antitrust Suit Survives Motion to Dismiss By Lillian Grinnell

By Lillian Grinnell

TheNorthern District of Illinois denied T-Mobile’s motion to dismiss for failure to state a claim in an antitrust class action brought by a proposed class of Verizon and AT&T customers, who sued after T-Mobile’s merger with Sprint. At the same time, however, the Court granted the motion to dismiss for lack of jurisdiction and improper venue brought by T-Mobile’s co-defendant, SoftBank Group Corp (“SBG”).

Facts

Judge Durkin outlined the considerable regulatory scrutiny and hurdles faced by T-Mobile and Sprint in the more than two years between the announcement of the intended merger and the deal’s completion, which included “the Federal Communications Commission (“FCC”), the U.S. Department of Justice (“DOJ”) Antitrust Division, 14 State Attorneys General, two federal judges, and others.” Slip Op. at 2. The FCC had concluded that the merger would not lessen competition. The DOJ, meanwhile, entered into a settlement with T-Mobile and Sprint in which the companies agreed to divest various Sprint assets to Dish Network. Next a lawsuit to enjoin the merger brought by 14 State Attorneys General was dismissed after a bench trial but a later settlement was reached with the companies. Finally, a group of consumers sued in the Northern District of California to enjoin the merger and failed.

Then, after the merger finally closed in April 2020, a proposed class of AT&T and Verizon customers brought the instant case against T-Mobile, Deutsche Telekom AG, and SBG under Section 7 of the Clayton Act (15 U.S.C. § 18) and Section 1 of the Sherman Act (15 U.S.C. § 1), seeking to unwind the merger after the fact and to recover damages alleged overcharges.

In their 12(b)(6) motion to dismiss for failure to state a claim, T-Mobile along with SBG claimed that the plaintiffs lacked antitrust standing. First, they argued that as customers of the other two major network providers, the plaintiffs—not customers of T-Mobile—were unable to make a causal connection between their alleged overpayments and the merger, as AT&T and Verizon set their own prices. But the fact that the plaintiffs are customers of other firms, the Court found, was not fatal to their claims, as they were able to plausibly allege in their Complaint how the merger had reduced competition in the market – from four major players to only three – which led to higher prices. Plaintiffs alleged that “as soon as the merger was signed, AT&T and Verizon began slowing their competitive efforts, including their aggressiveness in responding to prices… [which] manifested in stagnant pricing, low customer attrition or ‘churn’ rates, increasing wireless service revenue, and decreasing offers of plan changes.” Slip Op. at 26. Plaintiffs’ allegations, in turn, were supported by data from the Bureau of Labor Statistics.

Next, T-Mobile argued that external factors like the Covid pandemic and inflation were to blame for the higher prices, and that these causes were even admitted in the plaintiffs’ Complaint. But the Court disagreed, finding that even with those external factors the plaintiffs had still made out plausible allegations, which were all that was required at this stage. The Court also distinguished this case from those where harm to a business caused harm to its customers, which would be too indirect of an injury. Here, Judge Durkin noted, “Plaintiffs are direct purchasers in the same market that was allegedly affected by the merger.” Their injury, therefore, was not too remote to disqualify them from antitrust standing.

T-Mobile also argued that the correct class would have been one of T-Mobile’s own customers, and that these were the customers with the more direct injury. The Court rejected this argument too, as the injury alleged was an increased concentration and reduced competition in the market, which would have directly affected customers of all three remaining competitors equally. Nor were the plaintiffs’ damages too speculative, as T-Mobile argued next. As the Court found, the plaintiffs did pay higher retail prices, so it was only the process of calculation that could become complicated, which was not the same thing. With all of the above considered, plaintiff established antitrust standing. The Court also found that the plaintiffs had adequately alleged anticompetitive effects.  Slip Op. at 35.

Finally, T-Mobile argued that the suit was barred by laches and because, they claimed, the statute of limitations should have begun in 2018 when the merger was announced, and not 2020, when it was completed. This too was rejected by the Court as the effects of the merger would only have begun after the merger’s actual completion.

In its separate motion to dismiss for lack of jurisdiction and improper venue, however, SBG successfully argued that because it did not transact business in Illinois, nor did it maintain a presence there, it did not meet the Clayton Act’s venue requirements in the Northern District of Illinois. Plaintiffs argued that the bank had engaged in a series of investments in various Illinois companies, but those investments were made by SBG’s subsidiary, which was not directly controlled by SBG and furthermore had not engaged in the anticompetitive conduct at issue in this case. The Court also found that it lacked jurisdiction over SBG for the same reason. Plaintiffs attempted to argue that SBG also qualified for jurisdiction under the co-conspirator doctrine, but as the Court noted, this was not a conspiracy case and it also had doubts as to whether the doctrine was valid in Illinois.

Analysis

As antitrust enforcement efforts ramp up, this is an important case to review as it involves the potential unwinding of a merger that had already (albeit after many hurdles) passed a great deal of regulatory scrutiny. T-Mobile and Sprint had already agreed to numerous conditions in various agreements with regulators to offset any potential anticompetitive effects of the merger, but nevertheless, here plaintiffs were after the fact able to put together a set of allegations regarding antitrust injury in spite of the agreements with regulators. In their motion to dismiss, T-Mobile and SBG had called the lawsuit unprecedented, and private enforcement in addition to governmental regulation may indeed pose a serious threat to other mergers of this scale in the future.

Agency Updates

This feature includes excerpts from selected press releases issued by the Antitrust Division, US DOJ, the Federal Trade Commission and the California Attorney General’s Office.  It does not include all press releases issued by those offices.  This appears to be a truly transitional time in antitrust enforcement and reading the press releases can be very helpful to stay on top of changes.

Antitrust Division, US Department of Justice

To link to all Antitrust Division, DOJ press releases, go to:  https://www.justice.gov/atr/press-releases.  Highlights include the following:

Justice Department’s Procurement Collusion Strike Force Holds Its First Summit to Discuss Strategies to Combat Emerging Threats

Friday, November 17, 2023 (Office of Public Affairs Press Release)

The Justice Department’s Antitrust Division and the Procurement Collusion Strike Force (PCSF) hosted its first summit to convene its law enforcement partners from across the country to discuss emerging threats and strategies to confront them. Assistant Attorney General (AAG) Jonathan Kanter, Deputy Assistant Attorney General (DAAG) Manish Kumar, PCSF Director Daniel Glad and other department officials were joined by representatives from among the PSCF’s 11 national law enforcement partners and 22 U.S. Attorneys’ Offices.

During the summit, AAG Kanter, DAAG Kumar and Director Glad commemorated the PCSF’s fourth anniversary and reflected on its growth and success since its inception. They also detailed additional resources the division has dedicated to combat procurement collusion, emphasized the importance of law enforcement partnerships and a whole-of-government response to persistent threats in government spending and sharpened the PCSF’s focus on the challenges, risks and opportunities of increased federal spending.

Federal Trade Commission

To link to all FTC press release, see https://www.ftc.gov/news-events

FTC, DOJ and HHS Work to Lower Health Care and Drug Costs, Promote Competition to Benefit Patients, Health Care Workers

Recent agency actions have helped lower costs, increase care quality for consumers and promote competition across the health care market

December 7, 2023 FTC Press Release

Anticompetitive acquisitions and practices can chill fair competition, leading to higher health care costs, degraded working conditions, and less innovation across the health care and pharmaceutical industries. Through regulatory and legal actions, the Federal Trade Commission (FTC), Department of Justice (DOJ), and Department of Health and Human Services (HHS) are each working to promote competition to lower health care costs for families and taxpayers and improve the quality and availability of health care for patients.

All three agencies are working together to lower health care costs, including partnering on new initiatives which include a joint Request for Information to seek input on how private-equity and other corporations’ control of health care is impacting Americans. The FTC, DOJ and HHS will engage in data-sharing to the extent possible, with each agency naming health care competition officers to help lead these efforts.

Recent actions spearheaded by the agencies include:

Federal Trade Commission

“Decades of corporate consolidation has contributed to soaring costs across health care markets, with Americans now paying more for everything from life-saving medicines to a hospital visit,” said FTC Chair Lina M. Khan. “Safeguarding fair competition and rooting out unlawful business practices in health care markets is a top priority for the FTC. We will continue to fire on all cylinders to protect patients, health care workers, and competition in these critical markets.”

  • Orange Book Policy Statement + Challenges 
  • Proposed Noncompete Rule 
  • U.S. Anesthesia Partners/Welsh Carson
  • Amgen/Horizon Settlement
  • Eyeglass rule 
  • John Muir Health/ Tenet Healthcare Lawsuit 
  • Surescripts Settlement
  • IQVIA/ Propel Media Lawsuit
  • Data-Sharing 
  • Counsel for Health Care

Department of Justice

“Protecting and promoting competition in health care markets is among the Division’s top priorities,” said Assistant Attorney General Jonathan Kanter of the Department of Justice’s Antitrust Division. “Absent competition, real people suffer real harms. Those harms are especially grave when we’re talking about the medical care people depend on to live their lives. We are committed to weeding out anticompetitive practices and market consolidation that hinder Americans’ access to quality care at affordable rates, or deprive health care workers of fair wages and opportunity.”

  • Reinvigorating Antitrust Enforcement to Safeguard Competition in Healthcare Markets
    • United States v. Teva Pharmaceuticals 
    • United States v. Harwin 
    • United States v. Lopez 
    • United States v. VDA OC LLC 
    • Challenging Interlocking Directorates 
    • Aon plc and Willis Towers Watson Merger Abandonment 
  • Advancing a Whole-of-Government Approach
  • Memorandum of Understanding with HHS OIG – Last year, the Division announced a partnership with Department of Health and Human Service’s Office of the Inspector General to protect health care markets. This memorandum of understanding aims to increase coordination in information sharing, enforcement activity, and training that will strengthen enforcement of federal laws, including the full force of OIG’s exclusion authorities and the antitrust laws enforced by the Justice Department’s Antitrust Division, while ensuring the continuity of health care products and services. This partnership also supports the objectives of the President’s Executive Order on Promoting Competition in the American Economy.

                           *     *     * 

California Department of Justice

To link to all California Department of Justice press releases, see https://oag.ca.gov/media/news

Attorney General Bonta: Unredacted Federal Lawsuit Against Meta “Damning”

Monday, November 27, 2023

OAKLAND — California Attorney General Rob Bonta today announced the public release of a largely unredacted copy of the federal complaint filed by a bipartisan coalition of 33 attorneys general against Meta Platforms, Inc. and affiliates (Meta) on October 24, 2023. Co-led by Attorney General Bonta, the coalition is alleging that Meta designed and deployed harmful features on Instagram and Facebook that addict children and teens to their mental and physical detriment. As originally filed, however, much of the federal complaint included information conditionally under seal. Based on the company’s own documents, the removal of the redactions provides additional context for the misconduct that the attorneys general allege against Meta. 

“Meta knows that what it is doing is bad for kids — period. Thanks to our unredacted federal complaint, it is now there in black and white, and it is damning,” said Attorney General Bonta. “We will continue to vigorously prosecute this matter.”

Highlights from the newly revealed portions of the complaint include the following:

  • Mark Zuckerberg personally vetoed Meta’s proposed policy to ban image filters that simulated the effects of plastic surgery, despite internal pushback and an expert consensus that such filters harm users’ mental health, especially for women and girls. Complaint ¶¶ 333-68.
  • Despite public statements that Meta does not prioritize the amount of time users spend on its social media platforms, internal documents show that Meta set explicit goals of increasing “time spent” and meticulously tracked engagement metrics, including among teen users. Complaint ¶¶ 134-150.
  • Meta continuously misrepresented that its social media platforms were safe, while internal data revealed that users experienced harms on its platforms at far higher rates. Complaint ¶¶ 458-507.
  • Meta knows that its social media platforms are used by millions of children under 13, including, at one point, around 30% of all 10–12-year-olds, and unlawfully collects their personal information. Meta does this despite Mark Zuckerberg testifying before Congress in 2021 that Meta “kicks off” children under 13. Complaint ¶¶ 642-811. 

A copy of the largely unredacted complaint can be found here


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