Published on MediaPost, 12 February 2022
You probably heard about it: Meta, the company formerly known as Facebook, last week achieved the ignoble honour of posting the largest one-day drop in value in history. Meta shareholders lost $237 billion in aggregate, with more than 10% of that — $29 billion — accruing directly to Mark Zuckerberg.
That Zuckerberg should bear the brunt of the hit is only fair. While he was otherwise occupied building his unironically dystopian metaverse (as Amy Charlotte Kean put it, “That Facebook’s first ad for Horizon tried SO hard to make it seem like The Good Place is indisputable proof that it’s The Bad Place”), the rest of his company was throwing a tantrum in a desperate bid for attention, shedding daily active users and reducing revenue forecasts as the late majority finally made their way to TikTok.
But those attention-grabbing headlines aren’t the only troubles plaguing the social network. A few days earlier, Diem, the cryptocurrency Facebook had launched in 2019 under the name Libra, called it quits. Apparently, per Diem CEO Stuart Levey, it had become “clear from our dialogue with federal regulators that the project could not move ahead.”
It’s hard to convey the magnitude of my schadenfreude. When Libra launched in 2019, I wrote about what a terrible idea it was for Facebook to be allowed anywhere near currency governance. The regulators must have read my article.
And this week brings more bad news for Meta. Last August, an investor filed a major lawsuit against them on the back of the older Cambridge Analytica lawsuit. Basically, Facebook had thrown a bunch of cash at the Federal Trade Commission to settle the Cambridge Analytica suit, but then they threw a bunch more to get the FTC to agree not to go after Mark Zuckerberg personally.
Turns out investors don’t really like it if you spend almost $5 billion of their money just to keep one guy from getting in trouble, so that’s what this new suit is about. It names Zuckerberg personally as a defendant, along with Sheryl Sandberg, Peter Thiel, Marc Andreessen and other board members.
We can all imagine the kind of legal tactics a company like Meta would deploy: an army of high-priced lawyers dragging things out as long as they can and arguing every minor detail to the maximum extent possible, overwhelming and exhausting the opposition.
Well, yesterday Judge Vincent Chhabria decided he’d had enough. As Jason Kint reported, the Judge said both Meta and its law firm should be sanctioned for their foot-dragging. He said that Sandeep Solanki, the executive Meta put forward to represent them, has to be in attendance for every future session along with anyone else above him who would need to be there to make decisions on behalf of the company. If they can’t make a decision at a meeting, the company will be sanctioned. If they make a decision that changes after the session, they’ll be sanctioned. As Kint said, “I've never seen a company and it's [sic] very top lawyers/firm get scorched by a Judge like that one. I suggested popcorn but in all honesty I didn't expect the show to be that good.”
I wrote about this lawsuit last September, in a column called, “Could The Facebook Empire Be Crumbling?” I’m doubling down on that idea now. Nobody wants their shitty cryptocurrency. Nobody is going to want their shitty metaverse. The lawsuits will continue to come thick and fast, and their seemingly impenetrable armour will begin to crack. The writing is on the virtual wall, and it’s only a matter of time.
Kaila Colbin, Certified Dare to Lead™ Facilitator
Co-founder, Boma Global // CEO, Boma NZ
