Netflix, Meta Sued Over Anticompetitive Streaming Agreement That Led to End of Facebook Watch
Netflix and Meta are being sued for an alleged anticompetitive agreement that, the suit states, involved the deliberate “hobbling” of Facebook Watch.
The proposed class action suit, which was filed in Illinois federal court on Monday, argues that “Netflix CEO Reed Hastings and Facebook CEO Mark Zuckerberg became ‘of the same trade’ [in 2017] when Facebook began to directly compete against Netflix in the market for video-streaming services” by launching Watch, “a video-streaming platform that offered consumers the same kind of TV-like shows that were Netflix’s bread and butter.”
Hastings, who was on Facebook’s board of directors, is then alleged to have urged Zuckerberg to shut down Watch in an agreement dubbed ” a conspiracy against the public.” The two companies “allocated markets by agreeing that Facebook would cede the video-streaming market to Netflix by hobbling the Watch platform,” according to the suit.
“Facebook was willing to kneecap its Watch video service in exchange for extremely valuable consumer data from Netflix as well as Netflix’s dramatic increase in its spending on Facebook advertising,” the lawsuit states.
In return, Netflix was allowed to unfairly raise prices, according to the suit. The proposed class action, which also alleges that the two companies violated a section one of the Sherman Act, would cover anyone who subscribed to Netflix in or after 2017. Violations of the antitrust law of 1890 entitles plaintiffs to recover, as explained in 19th century prose, “threefold the damages by him sustained.”
Facebook Watch was launched in August 2017 as an online video-on-demand service that included Jada Pinkett Smith’s buzzy Red Table Talk. The viral talk show and the platform were both shut down in 2023.
Other Facebook Watch programming featured shows from Courteney Cox, Bear Grylls, Bill Murray, Nicole Byer, JoJo Siwa, Steve Wilkos and Will Smith that ranged from news to comedy to reality and game shows.
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