FTC and Meta Spar Over Discoverability of Agency Memoranda in Antitrust Spat

On Tuesday, the Federal Trade Commission (FTC) opposed Meta Platforms Inc.’s bid to compel production of two internal memoranda from 2012 and 2014 regarding whether to investigate Facebook’s acquisitions of Instagram and WhatsApp. The filing comes as the antitrust enforcement action seeking to break Meta up proceeds through discovery and after the agency’s amended pleading survived Meta’s second dismissal bid in January.

The District of Columbia federal court overseeing the case permitted the FTC’s monopolization suit to proceed on grounds that it sufficiently alleged that Facebook dually possesses monopoly power in the personal social networking services market and willfully maintains that power through anticompetitive conduct. In so finding, the court noted that Facebook’s acquisitions of Instagram and WhatsApp may likely have stemmed from its desire to neutralize the threat of competition.

In this week’s filing, the FTC resisted Facebook’s attempts to get hold of the two “predecisional” reports, agency staff’s internal recommendations and advice relating to the two acquisitions. The opposition also made clear that the memos do not pass judgment on Facebook’s acquisitions, as the only time that occurs is when the FTC itself commences an administrative proceeding or files suit in federal court. 

Substantively, the FTC argued that the memos are entitled to discovery privileges including deliberative process protection and work product protection. While Meta said it aims to learn the FTC’s view of markets relevant to the acquisitions in 2012 and 2014, perceived competitors, and assessment of the likelihood of harm to consumers, the FTC countered that such information is “inextricably intertwined” with proprietary analyses and recommendations.

“The disclosure of ‘material that could be characterized as factual’ related to these issues would inevitably expose staff’s analyses, advice, and recommendations,” the opposition said. Further, the FTC argued that disclosure of its memos would chill free and candid analysis and impede agency operations.

The opposition also addressed Meta’s “hyperbolic accusations of a ‘cover up,’” arguing that it cannot serve as the basis for curtailing the FTC’s privileges. The agency said that the documents contain no findings, evidence, or admissions that Meta can use, despite its claims. Instead, the FTC reiterated that the memos “express the analyses and advice of individual staff members, which are core work product, and an essential part of ‘the give-and-take of the consultative process.’”

The FTC is represented by its own counsel and Facebook by Kellogg, Hansen, Todd, Figel & Frederick P.L.L.C.