United States v. Facebook, Inc.

CourtDistrict Court, District of Columbia
DecidedNovember 27, 2023
DocketCivil Action No. 2019-2184
StatusPublished

This text of United States v. Facebook, Inc. (United States v. Facebook, Inc.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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United States v. Facebook, Inc., (D.D.C. 2023).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

v. Civil Action No. 19-2184 (TJK) FACEBOOK, INC.,

Defendant.

MEMORANDUM OPINION

In July 2012, the Federal Trade Commission and Defendant Facebook, Inc.—now known

as Meta Platforms, Inc.—resolved an administrative proceeding over Defendant’s alleged unfair

and deceptive business practices relating to user privacy through the FTC’s entry of an adminis-

trative decision and order. Among other things, the 2012 administrative order mandated that De-

fendant maintain a comprehensive privacy program. In July 2019, the FTC accused Defendant of

violating the administrative order and committing related violations of law, and the Department of

Justice filed this suit to seek civil penalties and injunctive relief. In April 2020, the Court entered

the parties’ Stipulated Order that imposed $5 billion in civil penalties against Defendant and di-

rected Defendant to consent to the FTC’s reopening of its administrative proceedings to modify

the 2012 administrative order. The FTC did so soon after. Under the Stipulated Order, the Court

retained jurisdiction for purposes of the Stipulated Order’s construction, modification, and en-

forcement.

Earlier this year, however, the FTC ordered Defendant to show cause why the 2020 admin-

istrative order should not be modified, because of Defendant’s additional alleged violations of the

2012 administrative order, violations of the 2020 administrative order, and related alleged violations of law. In response, Defendant moves to enforce the Stipulated Order and enjoin the

FTC from reopening the administrative proceedings against it on both a preliminary and permanent

basis.

For the reasons explained below, the Court finds that the obligations imposed on Defendant

through the FTC’s 2020 administrative order, although set forth in an attachment to the Stipulated

Order, were not made part of the Stipulated Order itself. As a result, the Court lacks jurisdiction

over claims related to potential changes to the 2020 administrative order and the FTC’s authority

to reopen its proceedings and modify that order, because those claims do not involve the construc-

tion, modification or enforcement of the Stipulated Order. Moreover, Defendant’s remaining

claim that the FTC might make a small change to the 2020 administrative order that is inconsistent

with the Stipulated Order does not warrant preliminary injunctive relief. Thus, as explained below,

Defendant’s motion will be denied.

I. Background

In 2011, the FTC filed an administrative complaint against Defendant, alleging “unfair and

deceptive” privacy practices in violation of the FTC Act, 15 U.S.C. § 45(a). See In the Matter of

Facebook, Inc., No. C-4365, 2012 WL 3518628 (F.T.C.) (July 27, 2012) (“2012 Action”). As part

of the settlement of that action, in July 2012 the FTC entered an administrative order requiring,

among other things, that Defendant maintain a comprehensive privacy program. ECF No. 3

(“Compl.”) ¶¶ 28–33; 2012 Action.

In July 2019, the FTC accused Defendant of violating the 2012 administrative order and

committing related violations of the FTC Act, and the DOJ filed this suit to seek civil penalties

and injunctive relief. Compl. ¶¶ 1, 43–48, 155–90. In April 2020, the Court entered the Stipulated

Order the parties proposed to resolve the suit. The Stipulated Order imposed $5 billion in civil

penalties against Defendant. ECF No. 4-1 at 3. It also ordered Defendant to “consent to:

2 (i) reopening of the proceeding in FTC Docket No. C-4365; (ii) waiver of its rights under the show

cause procedures set forth in Section 3.72(b) of the Commission’s Rules of Practice, 16 C.F.R.

§ 3.72(b); and (iii) modifying the Decision and Order in In re Facebook, Inc., C-4365, 2012 FTC

LEXIS 135 (F.T.C. July 27, 2012), with the Decision and Order set forth in Attachment A.” Id. at

4. Attachment A to the Stipulated Order was a proposed administrative order that, once adopted

by the FTC, would replace the 2012 administrative order. Id. at 9–30. The Court reviewed the

terms of the parties’ proposal and found that the parties had consented to it and that it was fair,

reasonable, and in the public interest. ECF No. 34 at 8–17. Thus, in April 2020, the Court entered

the Stipulated Order and closed the case. ECF No. 35. The Stipulated Order provided that the

Court would “retain jurisdiction in this matter for purposes of construction, modification, and en-

forcement of this Stipulated Order.” Id. at 5.

Not long afterward, the FTC issued an order summarizing the proceedings here and “de-

termined that it is in the public interest to reopen the proceeding . . . pursuant to Commission Rule

3.72(b), 16 C.F.R. § 3.72(b), and to issue a new order.” ECF No. 38-11 at 2. Thus, the FTC

reopened its administrative proceedings and modified the 2012 administrative order by replacing

it with Attachment A, which then became the 2020 administrative order. Id. at 2–24. Two of the

five FTC commissioners dissented from the FTC’s decision to issue the 2020 administrative order.

Id. at 2.

About three years passed. Then in May 2023, the FTC invoked its reopening authority

under 15 U.S.C. § 45(b) and issued an order directing Defendant to show cause why the 2020

administrative order should not be modified because of additional alleged violations by Defendant

of the 2012 administrative order, violations of the 2020 administrative order, and related alleged

violations of the FTC Act. ECF No. 38-4. The show-cause order proposed far-reaching

3 modifications to the 2020 administrative order that the FTC says are intended to “strengthen and

enhance” the order’s protections. Id. at 13. For example, the proposed modifications include new

provisions (1) limiting Defendant’s use of information collected from minors, (2) prohibiting De-

fendant from introducing any new products or features pending its privacy program coming into

full compliance with the order, and (3) extending the application of the order’s existing provisions

to Defendant’s use of facial recognition technology. Id. at 13–14. The FTC directed Defendant

to respond within 30 days and said it would “first consider [Defendant’s] Answer and then deter-

mine what process is appropriate to resolve any issues that arise from that Answer,” and eventually

“determine whether to make the [proposed modification] final or modify it in any way.” Id. at 2.

Rather than answer the FTC’s show-cause order, though, Defendant moved this Court to

enforce the Stipulated Order and enjoin the FTC from reopening administrative proceedings

against it on both a preliminary and permanent basis. ECF No. 38. The FTC extended Defendant’s

deadline to answer to allow the Court to consider the motion. ECF No. 53 at 32.

Defendant’s argument is three-fold. First, it argues, because this Court retains exclusive

jurisdiction over the Stipulated Order “for purposes of [its] construction, modification, and en-

forcement,” the FTC cannot modify the 2020 administrative order through its proposed adminis-

trative proceedings. ECF No.

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