Meta has again been forced to defend its relationship with Netflix after it was accused of shutting Facebook Watch in order to maintain its advertising relationship with the streamer.
The allegations that Facebook withdrew from the video platform were made by a group of advertisers suing the company.
If successful the Plaintiffs would receive a percentage of Facebook’s advertising revenue between 2016 and 2019.
Shockingly untrue. Meta didn’t share people’s private messages with Netflix. The agreement allowed people to message their friends on Facebook about what they were watching on Netflix, directly from the Netflix app. Such agreements are commonplace in the industry. https://t.co/qjeC0iF9Kv
— Andy Stone (@andymstone) April 2, 2024
Last week, papers relating to the December 2020 lawsuit were finally released in place of earlier redacted versions.
The claim of unfair competition centres on the claim that Meta’s relationship with Netflix helped the social network maintain its grip on the social media advertising market. The emergence of Facebook Watch as a potential competitor to Netflix was complicated by the then Netflix co-CEO Reed Hastings also sitting on Facebook’s board of directors.
In a letter written on June 14 last year, the plaintiff’’s co-lead counsel Brian Dunne outlined the concerns “… in a period of high apex-level communications between Hastings and Facebook’s CEO and COO (Mark Zuckerberg and Sheryl Sandberg), the companies struck an agreement in which Facebook abruptly cut original programming from Watch beginning in May 2018, withdrawing from direct competition with Netflix, in exchange for increased signals sharing and ad purchases by Netflix.
“This agreement hurt one Facebook product (Watch) in order to serve the company’s primary goal of protecting its monopoly position in the United States Social Advertising Market, a digital advertising submarket in which Facebook commanded a substantial price premium and worked to maintain its competitive moat through any means at its disposal.”
Meta says an arrangement that allowed Netflix subscribers to post details of what they were watching – instigated after Hastings joined the Board in 2013 – was in common with similar arrangements elsewhere in the industry. “Meta didn’t share people’s private messages with Netflix. The agreement allowed people to message their friends on Facebook about what they were watching on Netflix, directly from the Netflix app. Such agreements are commonplace in the industry,” said Meta’s Comms Director Andy Stone in a statement posted on Twitter/X.
Funding to Facebook Watch was reduced in 2018 before the dedicated app was finally withdrawn in 2023.
