Facebook engaged in ‘calculated’ campaign to eliminate competition, claims businessman

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Facebook is facing allegations that it unfairly forced a businessman, who earned hundreds of thousands of dollars a month from advertisements on the social network, out of business.

Jason Fyk, of Cochranville, Pennsylvania, who earned up to $300,000 a month running humorous pages on Facebook aimed at college students, claims in a lawsuit that Facebook “destroyed” his business and coerced him to pay tens of thousands of dollars to promote his web pages.

The case is one of a number of legal actions brought by individuals and companies that claim Facebook has unfairly put them out of business after encouraging them to build businesses or applications that were dependent on the social media platform.

They include Six4Three, which developed image recognition technology that was used in an app called Pikinis to identify Facebook friends wearing bikinis, and a case brought by Swedish App developer Styleform IT, which produced an app to raise awareness about breast cancer.

A cache of about 7,000 pages of confidential and highly confidential documents from the Six4Three case were provided to investigative journalist Duncan Campbell, who shared them with Computer Weekly, NBC in the US and Süddeutsche Zeitung in Germany.

Fyk claims Facebook ‘muscled out’ his posts

Fyk argues that Facebook unlawfully blocked the content of his Facebook business pages, while failing to block the same content from his competitors, and “muscled out” his Facebook posts to make room for sponsored ads that generated money for Facebook.

Facebook denies the allegations, filed in the Northern District Court of California, on the grounds the US Communications Decency Act (CDA) gives it legal immunity for deciding whether to publish or withdraw third-party content. It argues that the case should be dismissed with prejudice.

According to the complaint, Fyk turned to Facebook to create a business after facing bankruptcy and eviction. He dedicated all the money he had, rather than buying food and other essentials for himself and his family, to building an audience on Facebook.

The businessman claims to have built up millions of followers for humorous Facebook pages with titles like “Funniest Pics Official”, “Funnier pics” and a series of fan pages for characters in cartoon series such as Family Guy, which generated significant advertising income.

Fyk alleges that in October 2016, Facebook “destroyed and severely devalued” 11 of his pages, causing him to lose hundreds of thousands of dollars in monthly earnings.

He claims that Facebook selectively enforced the Communications Decency Act against his Facebook pages, while allowing a competitor to run identical content.

“There was absolutely positively nothing about Fky’s pages violative of the CDA,” the complaint alleges. “And certainly ‘no good faith’ basis for Facebook’s wreaking havoc on Fyk.”

Developer Six4Three accuses Facebook of threats

In a separate long-running case, Six4Three claims that under the direction of Facebook CEO Mark Zuckerberg, the social network used its platform as a weapon to gain leverage against competitors, which led to Six4Three’s collapse.

Six4Three’s lawsuit accuses Facebook of making threats to shut down developers’ access to data, unless, for example, companies sold to Facebook for a purchase price below their fair market value, purchased large amounts of unrelated advertising with Facebook, or agreed to feed all their data back to Facebook.

Facebook argues in court documents that Six4Three’s case is based on the premise that it was entitled to unfettered, unchanged access to Facebook’s free Developer platform in perpetuity. “Facebook did not make any promises to [Six4Three] and the law imposes no such obligation on Facebook,” it said.

Facebook also argues that it gave Six4Three ample notice that it intended to eliminate developer access to its friends’ photos application programming interface (API).

The chairman of the House of Commons Digital, Culture, Media and Sport (DCMS) Committee, Damian Collins, took the unprecedented step of dispatching the serjeant at arms to escort Six4Three’s founder, Ted Kramer, to Parliament in November 2018, after Zuckerberg repeatedly refused to answer MPs’ questions in the wake of the Cambridge Analytica scandal.

Kramer was ordered to hand over thousands of Facebook’s confidential and highly confidential documents which had been placed under seal by the court, including personal emails belonging to Zuckerberg, which reveal how Facebook profited from individuals’ private data, while apparently spending little time discussing privacy.

The DCMS subsequently published some of the documents, along with a hard-hitting report into its investigation into “fake news,” which accused Facebook of being “digital gangsters”.

Swedish App company claims Facebook misled developers

Swedish App developer, Styleform IT, filed a complaint against Facebook in November 2018, using similar wording to Six4Three. It accuses Facebook, under the direction of Zuckerberg, of deliberately misleading tens of thousands of software developers into building applications that helped Facebook grow from 20 million active users in 2007 to 2.23 billion active users by the second quarter of 2018.

Styleform IT’s Pink Ribbon app raised over 200,000 to support breast cancer. Another app, called Climate Smart, aimed to support solutions to address climate change, and was used by more than 17,000 Facebook users. A third app focused on new year’s resolutions.

The company claims that Facebook required all app developers to upgrade to a new application programming interface – Graph API v 2.0 – from 30 April 2015, which made it impossible for the company’s apps to access the Facebook data they needed to operate.

Facebook is due to file a response to Styleform IT’s allegations.

Fyk forced to sell money-making Facebook pages

Fyk claims in court filings that as a result of Facebook’s actions, he was forced to sell eight of his pages for a nominal sum of £1m to an unnamed competitor in Los Angeles, California. He claims that a Facebook employee flew to Los Angeles to assist the competitor with the “fire sale”.

According to the complaint, after the sale went through, Facebook restored the pages that it had previously claimed were in breach of the CDA.

Fyk claims that over the course of a year he paid $43,000 to Facebook in an effort to participate in the “paid for reach” programme, whereas the competitor had paid in $20m over five years.

“Facebook just wanted to steer Fyk’s business/pages…to a competitor and otherwise eliminate Fyk by any means necessary,” the legal filings allege.

Fyk alleges that Facebook initially welcomed content creators onto the “free” platform before unilaterally deciding, overnight, to implement a “paid for reach” programme that allowed users to pay Facebook to promote their work as “sponsored content”.

“In order to clear space for Facebook’s advertising efforts, Facebook had to clear out posts on Facebook user news feeds that the users actually wanted to see,” the complaint says.

Facebook gradually ratcheted up the alleged “pay to play”, leading to Fyk’s pages being unpublished or deleted in October 2016, and him being locked out of his advertisement account so that he could no longer participate in the “paid for reach” programme, the complaint alleges.

Facebook protected by US Communications Decency Act

In its motion to dismiss Fyk’s complaint, Facebook asserts that his claims are barred by Section 230 (c)(1) of the Communications Decency Act, which it said “immunises internet platforms like Facebook from claims that seek to target them for moderation of third-party content”. Facebook states that one of Fyk’s pages was dedicated to photos and videos of people urinating.

The social media company argues that Fyk failed to identify any contractual or legal provision which gave him the right to maintain content on Facebook or to prevent Facebook from promoting the content of other Facebook users or advertisers.

“The only purported ‘threat’ identified in the complaint at all is an alleged remark by an unnamed ‘high-ranking Facebook executive’ purportedly advising him that ‘one has to pay Facebook in order to play with Facebook’,” it says.

From real estate to Facebook

In an interview with Business Insider in 2014, Fyk, who previously worked in real estate, said he founded a business on Facebook to support his wife and family after real estate collapsed in 2005. He bought the domain WFTMagazine.com, which he rechristened “Where is the fun” to promote what he called college humour.

Fyk said in the interview that he was arrested shortly after the launch of the business, after a drunken brawl, spending two months in jail before being released, penniless, without charge. He turned to Facebook as a way to make money quickly, setting up some 40 Facebook business pages, and said that by 2014 he employed 16 people.

Fyk told Computer Weekly: “I’m not suing Facebook as a publisher of any content. I’m not considering them the publisher or the speaker. I’m saying they devalued my business by removing my ability to reach my audience.

“As an internet service provider, I’m saying they denied me the service they provided to other companies that pay them far more.”

The cases are ongoing. Facebook declined to comment.



Facebook engaged in ‘calculated’ campaign to eliminate competition, claims businessman