Engagement Data on ‘Competitor’ Sought by Meta to Refute FTC Claims

The U.S. Court of Appeals for the D.C. Circuit should compel documents refuting the FTC’s claims that social audio apps don’t compete with Meta platforms like Facebook, Meta argued Wednesday in docket 1:20-cv-03590. Meta seeks assistance in gathering documents from Alpha Exploration, which owns Clubhouse, an audio-based messaging app with millions of users. Meta served the company a subpoena seeking documents it said are “highly relevant to the FTC’s allegations that Clubhouse and similar applications do not compete with Meta.” Meta noted Clubhouse amassed millions of users within the first year after launching in March 2021, which refutes the FTC’s claim that Meta’s conduct has resulted in substantial barriers to entry. Clubhouse in its response said Meta has identified more than 100 competitors and served them with “highly burdensome and invasive subpoenas.” Clubhouse must “conserve its finite resources in a down market” and is seeking a cost-sharing agreement with Meta to produce the documents. Clubhouse is willing to search “custodial emails if Meta agrees in advance to pay for it,” Clubhouse said. Meta has incentive to create “more burden for companies it views as competitors,” the company said. Meta is seeking documents related to Clubhouse user engagement metrics. Clubhouse claims some of the documents are “competitively sensitive.” Meta argued the court shouldn’t shift any costs until after Clubhouse produces documents, shows costs were “significant” and demonstrates the shared costs are reasonable.