Netflix, Meta Sued Over “Quid Pro Quo” To Neutralize Facebook Watch Video Service

deadline.com:

A lawsuit seeking class action status accuses Meta of rolling back its now shuttered Facebook Watch streaming video service to give Netflix a clear path as part of a deal to split the spoils of the new digital landscape.

The antitrust suit filed in U.S. District Court for the Northern District of Illinois by two residents of the state (and Netflix subscribers) said that documents recently unsealed from an earlier lawsuit against Meta show that the two companies agreed to collude shortly after 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.” Netflix CEO Reed Hastings was on Facebook’s board of directors at the time and, the suit alleges, conversations with Facebook (now called Meta) CEO Mark Zuckerberg “ultimately led to a conspiracy against the public when Zuckerberg and Hastings allocated markets by agreeing that Facebook would cede the video-streaming market to Netflix by hobbling the Watch platform. “In exchange, Netflix would keep funneling its customers’ data and advertising spend to Facebook (which used the Netflix data to further supercharge its lucrative targeted-advertising algorithms).” The suit says the “anticompetitive agreement between Facebook and Netflix decreased consumer choices in video-streaming services while at the same time increasing consumer costs because Netflix was able to charge subscribers more than it would have but for Facebook’s relinquishing the video-streaming market to Netflix.