Meta, the parent company of Facebook, have allegedly allowed Netflix access to users' private messages in exchange for data, a recent antitrust lawsuit claimed. This development has come to light following Meta's decision last April to discontinue its streaming business, including original shows like Red Table Talk on Facebook Watch, citing cost-cutting measures and company layoffs.
The lawsuit, which accuses Meta of engaging in anti-competitive practices detrimental to social media competition and consumers, sheds new light on the circumstances surrounding the shutdown of Meta's streaming business. It alleges that Meta's decision was influenced by Netflix, a significant advertising partner, thus preventing Facebook from competing with Netflix in the streaming video market.
Court documents reveal a close relationship between Netflix and Facebook, with Netflix being a major spender on Facebook's advertising platform. It's suggested that Netflix had significant sway over negotiations, effectively preventing Facebook from entering its territory. Shockingly, agreements dating back to 2013 allegedly allowed Netflix access to users' private messages on Facebook.
Not Just Netflix
In exchange for this access, Netflix provided Facebook with valuable data on user interactions with Netflix's recommendations. Despite previous claims by Meta of implementing end-to-end encryption for all personal chats and calls on Messenger and Facebook, reports indicate that certain companies, including Netflix, were given access to read users' private messages.
According to the lawsuit accessed by Gizmodo, Netflix's former CEO Reed Hastings played a crucial role in nurturing the close partnership between the two companies, having sat on Facebook's board from 2011 to 2019. During this period, Netflix significantly ramped up its advertising spending on Facebook, reportedly reaching around $150 million annually by early 2019. Allegations suggest that Netflix also secured agreements with Facebook for enhanced access to data analytics during Hastings' tenure on the board.
Meta's Response
Meta reportedly responded to these allegations by asserting that its agreements and relationships with Netflix are standard industry practices. However, they did not directly address whether competition with Netflix influenced the decision to shutter Facebook Watch.
A spokesperson for Meta expressed confidence that the lawsuit's claims lack merit but declined to provide further details regarding the reasons behind shutting down Facebook Watch or the nature of their relationship with Netflix, in a statement to Gizmodo.