April 16, 2024
Meta
Pixabay

As social media consumption habits have increased today, internet advertisements on extensively watched social media platforms have become a significant online revenue source. Similarly, to secure the ad deals with Netflix, Meta squashed its rapidly growing streaming platform, Facebook Watch. 

According to a class-action antitrust lawsuit filed by a Meta user on April 14, 2023, Facebook closed its streaming platform to please Netflix, one of its biggest ad customers. The lawsuit alleges that Facebook allowed Netflix access to users’ DMs, committing anti-competitive activities and harming privacy rules. 

Now defunct, Facebook Watch was known to be the biggest competitor of YouTube and Netflix. First, it ended support for the original series last April and later shut down its streaming services. Jada Pinkett Smith’s Red Table Talk show was a huge hit among Facebook Watch’s originals.

The plaintiff’s letter reads:

“For nearly a decade, Netflix and Facebook enjoyed a special relationship. Netflix bought hundreds of millions of dollars in Facebook ads; entered into a series of agreements sharing data with Facebook; received bespoke access to private Facebook APIs; and agreed to custom partnerships and integrations that helped supercharge Facebook’s ad targeting and ranking models.”

Unlike the latest court documents, Meta connected its streaming company’s demise as part of its cost-cut initiative. Besides, the organization then unemployed thousands of its workers and sent them home. However, the class action suit demands the court to have the CEO of Netflix, Reed Hastings, respond that the plaintiff’s claims are accurate.

The original complaint submitted to the court in December 2020 does not solely mention Netflix that the streaming giant has secretly inked the “Whitelist and Data sharing agreements” with Facebook but with dozens of other third-party app developers. But, the latest documents publicized recently ask the court to have Netflix’s CEO respond to the plaintiff’s documents. Still, the case has not reached an end and continues. 

Netflix is Facebook’s Biggest Ad Customer

According to the allegations in the newly unsealed documents, the plaintiff pointed toward the long-running Netflix ad deals on Facebook as the core reason behind Netflix’s strong relationship with the latter. Similarly, the letter accused Reed Hastings of directing negotiations to close Facebook Watch and end the streaming competition. 

The question that may arise in one’s mind is how Facebook can influence such decisions. The litigation answers this by noting both companies build a lucrative business connection. And it pushed Facebook to provide Netflix access to users’ messages inboxes allegedly. 

Last December, Meta mentioned that it features end-to-end encryption for users’ chats and calls on Facebook and Messenger platforms. In 2018, while speaking to Vox, Facebook revealed it does not use personal messages to improve ad targeting. But a few months later, the New York Times published a report, citing hundreds of pages of Facebook documentation, alleging Facebook authorized Spotify and Netflix to peek at users’ DMs. 

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