Emails from Mark Zuckerberg are the exclusive litigation center

Posted by Tran Cong
2
Dec 31, 2020
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The emails sent by CEO Zuckerberg are taken as evidence against Facebook in the US government's antitrust lawsuit.

"Should buy out rather than compete," Facebook boss Mark Zuckerberg wrote in a 2008 email, according to the content of a lawsuit filed by the US Federal Trade Commission (FTC) and a coalition of 48 states and territories. court.

Four years later, after Facebook acquired the photo-sharing app described by Zuckerberg as "very disruptive", the social network boss celebrated by explaining to a colleague via email: "Instagram is dangerous. "One great thing about startups is that they can always be easily acquired."



Rebecca Haw Allensworth, professor of antitrust major at Vanderbilt Law School (USA), said internal documents can always become the weakness of the defendant in antitrust cases. "However, I have never seen a lawsuit that relies heavily on the CEO's own words," she said.

Evaluating monopoly allegations based on the CEO's explanation of his actions can be viewed as a simple strategy for many people. However, it is controversial among judges and antitrust scholars.

But the FTC's choice is easy to understand. Zuckerberg's email series describes in great detail the mergers that will separate Facebook from competitors. The lawsuit avoids many problems by using what lawyers call "hot documents" to build an antitrust case.

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It used to work for Microsoft

The lawsuit against Facebook has many similarities with the US government v. Microsoft, which goes into history in 2001 when it proved that this software corporation had the ability to monopolize the market. The FTC will now have to prove that Facebook gathers market power in the social media arena by eliminating competitors, rather than relying solely on superior products. Leadership internal documents played a big role in both cases.

In the Microsoft lawsuit, the US government issued a memorandum of understanding in 1995, when founder Bill Gates called Netscape "a new, Internet-born rival". Just a few years later, a Microsoft executive reportedly said "we are going to suffocate Netscape".

When Microsoft prevented Netscape from accessing Windows users, such statements made it impossible for them to justify that their actions were not intended to sabotage the opponent. Microsoft lost the lawsuit.

While this tactic has been successful and seems to always prevail, the courts are quite reluctant to rule on the defendant's internal documents.

The problem of relying too much on internal email

Judges often assert that antitrust laws only focus on the economic consequences of a firm's actions, including whether they suppress competitors or not, not considering the motives of leaders. . Analysts say the CEO is not an economist and is sometimes arrogant, making emails and internal communications only surprise the jury, not the economic plausible argument.

Judges and scholars fear that the jury will see aggressive comments as evidence of a business's intentions to eliminate competitors. However, a company can "destroy" a competitor by doing better, what economists consider fair competition.

The Facebook employee training document reads: "If we don't create something that kills Facebook, something will do it." This might sound like a dreadful warning, but creating things to compete with startup rivals is what antitrust laws want Facebook to do, which is to promote innovation.

Based on statements that the defendant seems to reveal subjective intentions is a controversial act, because US laws do not make clear whether the defendant's intention to crack down on the competitor is of real significance. are not.

Proof role of intent

Conversely, the other types of evidence may not be enough to build an antitrust case.

The interrogation process in an exclusive lawsuit often revolves around the defendant taking a large position in the market by eliminating competitors or because the product is good or cheaper. The tricky thing is that the evidence often points to both scenarios.

Defendants were always able to point out product improvements through their actions, making it difficult to attempt to demonstrate elimination of a competitor. In the Facebook lawsuit, the group pointed to the growing user base and improved interface of Instagram in the hands of Facebook.

In most monopoly cases, courts will experience delays if they only use actual market data to answer the question: Do defendant grow through product innovation or competition fades away in the marketplace?

This is where the "proof of intent", information that shows the defendant's thoughts, can play out his role. If a CEO plans to merge to separate the business.
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