Six4three, LLC v. Facebook, Inc.

Filing 1

NOTICE OF REMOVAL (Filing fee $400 receipt number 0971-11098204) from San Mateo Superior Court. Their case number is CIV 533328. (). Filed byFacebook, Inc.. (Attachments: #1 Exhibit A, #2 Exhibit B, #3 Exhibit C, #4 Exhibit D, #5 Exhibit E, #6 Civil Cover Sheet, #7 Certificate/Proof of Service)(Miller, Laura) (Filed on 1/24/2017)

EXHIBIT B

Basil P. Fthenakis, Esq. (88399)

CRITERION LAW

PllLRB
P r'TEO COUNTY

2225 E. Bayshore Road, Suite 200
Palo Alto, California 94303
Tel. [phone]
Fax. [phone]
4

Sgg

FE8 0 6 'l3ik

Of counsel:

Qsr,,

.

Couth

David S. Godkin (admitted pro hac vice)
Andrew A. Caffrey, III (admitted pro hac vice)
BIRNBAUM& GODKIN, LLP
280 Summer Street
Boston, MA 02210
[phone]
[e-mail]
[e-mail]
10

'Attorneys for Plaintiff,
SIX4THREE, LLC, a Delaware
limited liabilitycompany

13

SUPERIOR COURT OF CALIFORNIA

COUNTY OF SAN MATEO
15

16

17
18

SIX4THREE, LLC, a Delaware limited

)
)
)

21

FACEBOOK, INC., a Delaware corporation
1 through 50, inclusive

'and DOES

Defendants.

)
)
)
)
)
)
)

22

CIV 533328

SECOND AMENDED COMPLAINT OF
PLAINTIFF, SIX4THREE, LLC, FOR
INJUNCTION AND DAMAGES FOR:
1. VIOLATIONOF CALIFORNIA
BUSINESS AND PROFESSIONS CODE
g$ 17200 ET SEQ.;
2. PROMISSORY ESTOPPEL;
3. NEGLIGENT MISREPRESENTATION;
4. INTENTIONALINTERFERENCE
WITH CONTRACT; AND
5. INTENTIONALINTERFERENCE
WITH PROSPECTIVE BUSINESS
RELATIONS.

)

Plaintiff,

19

20

Case No.

)

liability company,

23

24

Plaintiff, Six4Three, LLC, alleges
26

1.

as

follows:

This matter concerns Defendant Facebook, Inc.'s campaign

of promises,

enticements, and representations to third-party software developers ("Developers" ) such as
28
30

1

Case No.

CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

Plaintiff Six4Three, LLC ("643"), to develop applications for Facebook, based on Faccbook's
2

representations that Developers would have a level playing field, fair competition, and an

3

opportunity to grow their business. Facebook's campaign was part of a calculated strategy to

4

drive Facebook's own growth by leveraging the hard work of Developers. But once Facebook

5

decided

6

broke its promise

7

"bait and switch" tactic that is barred by California law,

it would prefer to no longer compete with Developers, it abruptly reversed

of fair competition in Facebook's platform. Facebook's conduct
as

course, and

here is a classic

detailed below.

PARTIES

9,
10

business at 535 Mission Street, 14th Floor, San Francisco, California.

On information and belief, Defendant Facebook, Inc., is a Delaware Corporation

3.

11

12

Plaintiff643 is a Delaware Limited Liability Corporation with a principal place of

2.

with a principal place of business of One Hacker Way, Menlo Park, California.

Plaintiff is ignorant of the true names and capacities of the Defendants sued herein

4.

13

tlirough 50, inclusive, and each of them, and therefore sues said Defendants by such

14

as Does

15

fictitious names. Plaintiff will amend this complaint when the true names and capacities of said

16

'Defendants have been ascertained. Plaintiffis inforined and believes and thereon alleges, that

17

Defendants Does

18

manner for the events and happenings referred to herein and proximately caused or contributed to

19

the injuries to Plaintiff as hereinafter alleged. Wherever in this complaint any Defendant is the

1

1

through 50, inclusive, and each

of them,

20,subject of any charging allegation by Plaintiff, it shall
21

are legally responsible in some

be deemed that said Defendants Does

1

tluough 50, inclusive, and each of them, are likewise the subjects of said charging allegation.

Plaintiffis informed and believes, and thereon alleges, that at all times herein

22

5.

23

mentioned, each

24

Defendants and, in doing the things herein alleged, was acting within the course and scope

25

agency and employment.

of the Defendants

was the agent and employee

of said

FACTS

26

27

of each of the remaining

6.

643 is an image pattern recognition startup company„

28
2

Case No.

CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

7.

1

Facebook operates a social networking service that enables users to connect and

2

share information

3

8.

with their fiiends and family.

Facebook refers to the network

of relationships between its users

"Graph" or

as the

the "Social Graph."

4

9.

5

The Facebook Developer Platform (also called "Facebook Platform" ) enables

Developers to make their applications and other services available to Facebook users.

6

I. LAUNCH.OF FACKBOOK PLATFORM IN 2007

7

10.

8

At 3PM PDT on May 24, 2007, Mark Zuckerberg, Facebook Founder

made a self-described revolutionary announcement to a crowded rooin

9

San Francisco. Zuckerberg announced the launch

10

of software

and CEO,

developers in

of I acebook Platform, which he had

11;weeks earlier in an interview with Fortune magazine

as

described

"the most p'owerful distribution

12

mechanism that's been: c'r'eat'cd;:in."a icncration." He went on in the Fortune interview to describe

'J3

the mo'tivation for creating Facebook Platform in this way: ".We want to make Facebook into

14

'something> of. an:.opeating svstcm:so vou'can:run'full:apphcations;" specifying that this

15

development was the internet-equivalent to what Microsoft did with Windows, which allowed

16

other developers to build applications for PCs. (See

17

http: //archive. fortune.corn/2007/05/24/technology/facebook.fortune/index.htm.)

l.

'

18

In fact, Zuckerberg's first demonstration of Facebook Platform was purportedly to

19

Bill Gates in early May 2007. Microsoft and Facebook

20

purchase banner ads on Facebook in which Microsoft had guaranteed Facebook a minimum
$ 100

21
!

had reached an agreement for Microsoft to

of

million per year tlirough 2011. Facebook Platform was positioned by Facebook to MicrosoA
driving force behind meeting Facebook's ambitious growth metrics. At the time of this

22

as the

23

announcement, Facebook had just exceeded 20 million active users and had raised only $ 37.7

24

million in venture capital investment. Even at this modest point in Facebook's growth, its photo

25

sharing application was the largest photo application on the Internet, and according to Facebook's

26

'n the quoted text here and elsewhere

28

in the Second Amended Complaint, representations by
Facebook or its employees have been underlined for emphasis.
3

Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

1

own internal statistics, drew more than twice the traffic of the next three photo sites combined at

2

the time

of the May 24,

12.

3

2007 announcement

of Facebook Platform.

Zuckerberg announced that the three key elements

of Facebook Platfoim were

" These were

three key themes he

4

"deep'i'ntcgration. mass distribution:.a'n'd ncw oivportunitv.

5

would repeat throughout the day and for years to come in numerous public conversations and

6

presentations. (See https://gigaom.corn/2007/05/24/live'-at-the-facebook-launch/.)
13.

7

'Thus, Zuckerberg made three distinct promises: (1) promise

of deep integration

8

with Facebook's social graph; (2) promise of Facebook's support in achieving mass distribution

9

of developer
14.

10

applications; and (3) promise

of an opportunity to build a business

By 8PM that evening, these key elements were memorialized on Facebook's

website with the official aimouncement "Facebook Platform Launches", stating
build::applications: that%ave the.same'access-'to

12

on Facebook.

integration in'to;-the-.social'raph

applications, such as photos, notes, and events.... The, power

"Y'ou.":caii".n'o'w":

as.Faceb'ook'3

of mass distribution is now in vour

hands. You. can, gain distribution for.vour appliCat'ions through the social graph like never before.

14

15:Applications.can

be v'iral1'v engiriecred."to'each

iiiillions,".ofFaccb'ook users

ciuicklV~and efficientlv",

16

through the profile, news feed,. and mini-feed..... With.access to deep.'in'tegra'tion into the site, and,,

17

mass distribution'{hro'ugIi.the social graph comes a new opportunity for vou to build a business

18

with.vour application. You are free to monetize vour canvas pages through advertising or other

19

transactions. that vou control." (See Facebook Platform Launches,

20

http: //web.archive.org/web/20070706002021/http: //developers.facebook.corn/news.php?blog=l

21

22

.

k

story=21).
15.

Facebook's announcement thus promised that (1) developers have "same access to

23

integration" for applications such

24

able to distribute applications through Facebook Platfoim; and (3) developers are able to

25

monetize applications through Facebook Platforin.

26

16.

as

photos and notes as Facebook employees; (2) developers are

Zuckerberg went on to say: "Tlie social graph is our'ase, arid we'e bui1t':a

27, framework that is completely op'tiiuized..for. developiri'g social applications''witliin

oui':-'8

.environment.... We believe that there is more value for evervone in letting other people develop.
Case No. CIV 533328

Plaintiffs

4
Second Amended Complaint for Injunction a'nd Damages

of the

1

atinlications on top

2

This is good for us because

3

'o our users

base

we'e built than

ifdevelopers:build

we could ever uossiblv nrovide on our own
i~eat applications then.thevire,providing a.service

and stren'ptheninp the social graph:... This is a bip opportunitv; We provide the

4

intemation and dist'r'ibiitio'n and develop~ers

5,

rovide the applications. We help users share more

i'nformation, and 'together we.'benefit,'

Zuckerberg thus promised that Facebook is committed long term to serving

17.

7

platform that lets developers build applications on a level playing field because it is a big

8

as a

opportunity for everyone.

10

Zuckerberg then announced that Facebook had been working with over 70

18.

9

developers in anticipation

of the launch of Facebook Platform, including Amazon,

Forbes, iLike,

Lending Club, Microsoft, Obama for America, Photobucket, Red Bull, Twitter, Uber, Virgin
12

Mobile USA, Warner Bros, Washington Post, and many others. (See live blog of F8 event from

13

'eading Internet blogger, Mashable, at http: //mashable.corn/2007/05/24/facebook-f8-

14

live/¹ClfbgFfPV5q0.)
Around 4PM during Zuckerberg's presentation, he announced 5 case studies from

19.

15

it was for all developers to integrate

16

these early developer partners aimed at showing how easy

17

with Faceb'ook Platform. Zuckerberg distributed case studies from Red Bull, Box.net, Lending

18

Club, Microsoft and Slide.corn. Zuckerberg continued to emphasize during this public, annual

19

keynote to Developers that Facebook Platform is the single biggest and most revolutionary

20

change to Facebook since its inception, stating: "4'verv once:.in a

21

'that allows pconle'to buil'd-'a'conitiletelv new:application

22, (See
23

—..

w'heal'e

a;blat'foim'''corn'es'alohi

sometimes even starts new, industries.,"

https://gigaom.corn/2007/05/24/live-at-the-facebook-launch/.)
20.

GigaOm,

a

leading Internet blogger, live blogged the event and further quoted

saying: "With photo-sharing, he explained,

'it's not just the photos that

it'

24

Zuckerberg

25

the whole photos application'.'-Third'-gart'v aurihcations won't be treated like second-class citizens

26

'on.Facebook, h'e saws; users can add them to their profiles and drag them and drop them to their

27

content. Applications can use Flash, JavaScript, and Silverlight

28

applications can issue unlimited notifications to users, and fit into the Facebook enviromnent by

as

.5

Case No.

CIV 533328

ifa user

spread,

approves them. Outside

'laintiff Second Amended Complaint for Injunction and Damages
s

1

accessing a 'fiiend selector'hat spits out each users'onnections.

2

serve ads on your app pages and keep all the revenue, se

3

process transactions within the site, keeping all the revenue without diverting users

4

Facebook." (See https://gigaom.cond2007/05/24/live-at-the-faccbook-launch/.)

2i.

5

Zuckerberg thus promised that

1

Now Zuckerberg says you can

them yourselves or use a network, and

(t) develoI!er applications won'

off

be "second class

citizens", (2) developer applications can access a user's connections and related user data made
available in the social graph; and (3) developer applications can sell ads through the Facebook

7
I

8

!

9

.

Platform.
22.

This grandiose language from Zuckerbergt obviously sparked substantial questions

10, from the developer

community so by 4:20PM pacific (1 hour and 20 minutes after the keynote

11

had started), Facebook had released the official "Facebook Platform FAQ", which was being

12

'circulated among bloggers to educate developers further qn this announcement. (See Exhibit

1,

13,Facebook F8 and Platform FAQ.) The Facebook Platform FAQ states, among other things:
',

14

What is Facebook Platform? Facebook Platform is a development systein that enables
companies and developers to build applications for the Facebook website, where all of

15

Facebook's 24 million active users
16,
17,inteiiratioiu in the Facebo'ok website

.

with them.'Pacsebook'Pl'atform offers'deep

disotribution through the social maph! and''an'.

'.op'por'tunitktonbiiild,aubiisin'essa,

18
19

'hat's

20
21

can interact

.,;

new in Facebook Platform?

We'e

Platform first shipped in beta in August 2006. With the latest. evolution. of Facebook
ca'n:nowlcreate appii'cations on'tlie F'acebook

.PI'astfo'rnid haowcVci';dthrird-'p'aitv".'dc'veiotpcrs

22
'3,

been adding functionality since Facebook

.site with. the same level

of integration

as

applications built bv internal Facebook
the a'bihtv todcreate Faeeb'ook ipplicrcatitiiis

24

developers.,'Now'developers-evervw'here.have

25

that deeplv intemate into the Facebook site„as wel as the potential for mass distribution

26

throiiili'tlic.so'cial. t'pra'ph aiid 'ii'ewubusiness oppoituri ities,

27

Why did Facebook launch Facebook Platform? Our engineers have created great

28

applications forFacebook,butwereco g nized that tthird-p art y develo p erscanhel p usmak e
6

Case No.

CIV 533328

Plaintiff's Second Amended 'Compl'aint for Injunction and Damages

Facebook an even more powerful social utility. Fnccbook PI'atforni:gives developers.

everywhere:the'tool's to create applicati'ons that we just wouldn't have the resources to

build in-house, and those applications make'Facebook an even better way for our users to
exchange information. Developers also benefit from the Faccbodk Platform as

it gives

them the potential to broadly distribute their applications and even build new business,

o'pp'ortuiiiti es

What kinds of applications can be built on Facebook Platform?, The kinds of
applications-",developers can build. on Facebook Platform are"'li'initc'd"only- bv tlieir

i'xiii'ginatioiis,'Because"applications are based on the Facebook- social'. graph thev can'be
,more. relevant to users, keeping pleo le in to'u'ch with what and whom thev care about.

10

We'e

already seen

a

variety of applications built by our developer partners, including

of the

12

those for sharing media files, book reviews, slideshows and more. Some

13

possibilities

14

Directory, available at http: //facebook.corn/apps.

15

Are there any restrictions on what developers can build? Developers'ar'c

16

to exercise their creativity when, building applications. Of:course. all applications. are.

17

~sub'ect to the Terms

of Facebook applications

are illustrated in the Facebook Platform Application

of Service. that everv developer

eii'cou'ra'gcd

agrees to, which include basic

reauiiciA'ends/stlch,as.not stori'ng an'y s'ensiti've user'in fol'lilati'on; not crc'ating.anv, offensive

illegal applications, and not building anything that:.phfshes:or spams users. And users

19

or.

20

will always have the power to report any applications that compromise Facebook's trusted

21

enviroiunent, keeping our users'nformation safe.

22:
23

How will Facebook deal with applications that compete with one another or even

24

compete with Facebook-built applications? %e'welcome.developers-w'ith:competing

25

applications, in'cludi'ng developers whose applications might compete.with Facebook-built

26

',

applications, Ma'tiy. applications'are likclv..to 6ffer'sin>ilar"fca'tures; We'v'e'.designed

27

1""acebook'Platform so.that:applications fr'om thircl-p irt'y:developers.:are'on a level plavinw~

28

field with applications built bv Facebook. Ultimately. our users will decide which
7

Case No.

CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

~alications thev find most useful, and it is these applications, that will become the most
p'opul'ar.

Can Facebook applications include ads? We want to enable.'developers. to build a
business on their Facebook.applications, so we'.rc eving,developers the freedom,to.,
idion'etiRe:tli'eir.appli'c'ations'as th'cy like'.,Developers can include advertising on their

applications'anvas pages, though no advertising will be allowed within the application
boxes that appear within user profiles.

Are you going to share revenue with developers? While revenue sharing is not
10

available at launch, we are looking into ways to share advertising revenue with
developers.... The version

of Fac'cbook Platform

already lets."devel'oper's'monetize their

12

applications as they like„,whether they. choose to offer it for free or to build a business on

13

their application.

14

23.

15

In sum, these representations by Facebook reflected the following promises to

Developers:

16

a.

Developers would have "deep integration";

17

b.

Developers would have access to the "social graph";

18

c.

Developers would have "an opportunity to build a business."

19

d.

Developers would have the same level

of integration

and ability to develop apps in

the same manner as internal Facebook employees;

20
e.

21

Facebook

will provide

adequate tools necessary

for Developers to build their

applications;

22

will help Developers achieve broad distribution of their applications;

23:

f.

Facebook

24

g;

so long as applications abide

by Terms of Service (e.g. are not offensive or

25

unlawful), Facebook will be neutral

26

the applications built on its operating

system;

as to

27
28
8

Case Vio.

CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

h.

any application that does not violate Terms

of Service, phish or spam

users,

contain offensive material, or break the law shall be accepted in Facebook

Platform;
i.

competing applications are welcome on Facebook's operating system;

j. Facebook will remain neutral among competing applications;

will remain neutral

k. Facebook

of whether they

regardless

l.

among its own applications and those

of developers

compete or not;

applications similar in purpose and content

will be allowed to compete

on a "level

playing field"
m. "level playing field" constitutes a definition of fairness in market competition, and

10

that definition of fairness means that ultimately users

will decide which

applications win the market, not Facebook or other third parties;

12

n.

13

implicit in this definition of fairness based on user decision is the necessary
consequence that Facebook shall take no actions to promote its own applications

14

or preferred applications from companies that have

a

special relationship with

16

Facebook in order to slant this playing field in a manner that makes

17

it less likely

for users ultimately to decide the winner;
o.

Facebook

will enable Developers

to build businesses on their operating system by

directly monetizing their applications on Facebook;

19

will be

able to sell ads on their application pages; and

20

p.

Developers

21

q.

Developers will have a choice as to whether they monetize their application on

Facebook's operating system.

22
23

II. DEVELOPERS RESPONDED ENTHUSIASTICALLYTO THK LAUNCHOF
FACEBOOK PLATFORM. JUST:-AS:FACFBOOK INTENDED

24
25

24.

The blogging community went into an immediate and prolonged frenzy over this

announcement. Paul B. Allen, founder

of Ancestry.corn

and well known Internet blogger,

27

summed up the general sentiment expressed by countless bloggers when he wrote that same day,

28

"I saw history in the making today...I

was lucky enough to be in San Francisco for the Facebook
9

Case No.

CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

1

f8 Platform launch event. This announcement was at least an 8.0 on the Richter scale. It was a

2

whopper.... A huge new opportunity was presented to the few hundred people in the room,

3

including 65 companies that have spent the last few weeks developing applications for the launch

4

of Facebook Platform.

5

of what Mark calls their "social graph" —the

6

real people and'their real connections to each other....[Facebook's] growth

7

.

Facebook is inviting anyone to develop applications for their users on top

accelerated by the Platform announcement.

core

of their service which basically

IfFacebook

keeps track

of

will be dramatically

is adding 100,000 new users per day with

8

its own few simple applications (like its photo sharing, a very simple service that has given

9,

Facebook twice as many photos as all other photo sharing sites combined), what

of thousands of developers

will happen

start building apps in Facebook and marketing

10

when thousands or tens

11

them to more users? Facebook

12

beyond. Rather than continue to try to develop features within its own proprietary, closed

13

network, basically keeping all of its users to itself...Facebook intuitively gets the concepts that

14

are so

will reach

50 million, then 100 million, then 200 million users, and

brilliantly discussed in Wikinomics (which are

so

non-intuitive to old schools business

15

'types), and has chosen to open up its network for all to participate in...Application developers

16

can now have access to core Facebook features, such as user profiles and user connections, and

17

even publishing to the News Feed, all with the control and permission

18

Facebook has 100 million users, in the not too distant future, having the ability to develop an App

19

in their system will almost be like being able to get

20

http: //www.paulallen.net/prediction-facebook-will-be-the-largest-social-network-in-the-world/.)

21

a

of Facebook

users... When

link on Google's own home page." (See

To Developers, Facebook Platform represented not just an entire new operating

25.

22

system, but an ecosystem that could potentially reorganize the entire Internet (potentially

23

replacing Google). The sentiment amongst Developers,

24

'and reported

25

launches-facebook-platform-they-are-the-anti-myspace/)

26

(http: //www.wsj.corn/public/article/SB117971397890009177-

27

wjdKPmjAqS 9ZZbwiRp CoSqvwQ 20070620.html), was that

28

Facebook, you

as

widely held throughout the industry

by popular sites like TechCrunch (http: //techcrunch.corn/2007/05/24/facebookand the Wall Street Journal

ifyou aren'

building for

will be left behind.
10

Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

Facebook and the Developers who were selected to participate in the private beta

26.

1

out to inakc Developers comfortable with this grandiose vision

2

of Facebook Platform quickly set

3

and create a level

4

instance, on May 29, 2007, just five days after Zuckerberg's announcement

5

Platfoim, Venture Beat, the popular tech blog, did a QKA with iLike founder, AliPartovi, who

6,was

of comfort to induce

them to participate in this entirely new industry. For

also an early advisor and shareholder

of Facebook

of Facebook. iLike was the first successful application

on Facebook Platform and for quite some time was the largest music application on the Facebook

7

'Platform. iLike was purchased by MySpace in 2009.

8

Tell me about your experiences with Platform

9

so far.

You'e been working on putting

10

iLike on Facebook for several months now. Yet on the integration since Friday mornin,

11

there have been bugs and other issues on iLike's end. What's the status?

12

Partovi: So, first to give you the back-story on how we got involved'. Over the past several

13,

months,

we'e

pushed and pushed with Facebook asking for some sort

of exclusive

14

'elationship.

15

rather create

16

then gave up a bit, and we were actually a bit late to the game learning about the platform

17

in detail. But when we finally did get access, our President, Hadi Partovi (my twin

18

brother) took very little time to decide this was

19

ago. We re-prioritized everything else, and started moving our people

20
21

'nto

They repeatedly said they won't do an exclusive relationship but would
a

level playing field where we could compete with other third parties. Wc

a

huge strategic priority. That was a month

off other projects

this. First two or three people, then a few more, and by the end it was

a

huge group

of

engineers pulling back-to-back all-nighters for a week-long sprint to the launch.

22

What made iLike think that Facebook Platform would be

23

24

Hadi has

big deal? What stood out about

it?

25

'.

a

strong background in the concept

a

of platforms...at 24 he

became the head

of

product management in the IE group at Microsoft, and was a key player in thc browser

A month

ago, even though the Facebook Platform wasn't

fully fleshed out,

he saw

26

wars.

27

just from the early beginnings of it that this could redefine web development. What he

28

said was,

'in the history of computing, there was the personal computer, there was
11

Case No.

CIV 533328

Plaintiffs Second Amended Complaint for Injunction and Damages

1

Windows, there was the web, and now the Facebook Platform'. You can imagine that I

2

and most our company was pretty skeptical. But he makes these calls so we followed him.

3

As to what stood out, it's a combination

4

Facebook Platforiii, like any platform, offers the developer building blocks to build apps

5

faster than they could

6

data

7

spread —due to the way the Facebook news feed works, an app can spread across the

8

community entirely by viral spread,

9

it...this essentially bypasses the idea of trying to make your app

10

& capabilities

ifthey were starting from scratch,

and to tap into a rich source

of

that would never otherwise be available; (2) the potential for viral

because Facebook is

11:,.team,

of three things: (1) the technology itself—

as

friends get notified when one person adopts

'viral's a standalone,

itself naturally viral; (3), 11ie'ihetori'c:,',fr'om-the Pa'cebook:man'agenieiit'.

starting from the CEO himself. made it clear that thev have

a

long-term

12:;commitmcnt: to. a level'@laving-field. For examnl'e.,thee-i>bsolutelv'-'reR'sed to'ice us any.,
13

.sgecial advantape,.insisting that the market needs to see. a level.Tilavina.f]e]d...we offered

14

,.tlicm':oiviier'sh'in'.i'ii'Cur'c'om'iianv. nionev„:etc'-. but:thev. h'ad.bio:ititerest:, FiirthcriTiorc;:thev

15

.built and launched. their own 'video'. app, but left it to 'compete'n its own merits

16

,alongsi'de other" third-.'painty apps ra'ther than makiiiu:it"pre-inst'all'ed': for 'a11.1'aceb'ook

17

users; .So. fk I";a~i'd '52,ina'de'this:. something we had to''iud",on.'"and:@3;:made: us comfortable.

18

'wi'th

19

'ith-ilikes-ali-partovi-on-facebook/.)

20

27.

the I'one-tcrin sti'ate'eiCiino'Iicatio'its

.

(See http: //venturebeat.corn/2007/05/29/qa-

Partovi's comments immediately following Zuckerberg's announcement serve

21

both to reflect the general sentiment held by Developers —
that Facebook had made clear its long

22

tenn commitment to

23

(Partovi was an early advisor and shareholder after all), were committed to helping Facebook

24

grow its new operating system quickly and induce developers to participate with large

25

investments

26

to build on the Facebook Platforin and was ultimately acquired by MySpace in 2009 in large part

27

due to that growth.

a

level playing field for Developers —and to show how Facebook's allies

of capital. After all, iLike saw

massive growth in the two years following its decision

28
12

Case No.

CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

.

III.FACKBOOKCONTINUED TO ACTIVELYPROMOTE FACKBOOK
PLATFORM TO DEVELOPERS
,

2
3

4
5

6

28.

Three days after Partovi's QUA with Venture Beat, on June 1, 2007 Facebook

released its own statement further clarifying its intentions with Facebook Platform, entitled

"Platforin is Here".
",Last Fridav,, we gr'oniised more information..so here

Facebook Platforin,

we'e

made

it so that

it is.... With this evolution-,of

anv developer can build the same applications

that we can. And bv that, we mean that thev:.can integrate 'their-application into
Facebook
9
10
11

12
13

14
15
16
17

— the 'soci'al graph — same wav that our, ap'nlications like Photos and
the
into

'No't'es are'i'nte'ki'ated,

" (See https://www.facebook.corn/notes/facebook/platform-is-

here/2437282130/)
29.

Thus Facebook promised that developers

will be able to build applications in the

saine way that Facebook can by accessing the social graph.
30.

As recently as February 23, 2016, this representation remained available on

Facebook's web page.
31.

Throughout the summer

of 2007

Facebook remained on the offensive about its

long-term commitment to developers on Facebook Platform. Facebook held numerous
Hackathons and Developer Meetups in various cities to introduce new developers to Facebook

18

Platform, it launched a Developer Feed and Wiki on its website to educate the Developer

19

community on the benefits of Facebook Platform and help them more seamlessly invest their

20
21

22
23

24
25

26
27

capital and resources towards building applications on the Facebook Platform. Facebook also held
contests with prizes for developers. 'Zuckerberg continued to emphasize the revolutionary impact

Facebook Platform would have on the Internet as a whole during this time. For instance, on July
'17, 2007, Zuckerberg was interviewed by Time Magazine:

Time: the frenzy suivounding Facebook seems to have intensified quite dramatically over
the past several months. What do you think is behind the company's newfound cachet?

Zuckerberg: I think the most recent surge, at least in the press, is around the launch of
Facebook Platforin. For the first time

we'e allowing developers who don't work at

28
13

Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

2

ifthcv were..That's a bio. deal because it means
thai. all developers "trave a'new'ivav-:of doi'n'g business if thev choose to take advantage of.

3

it. There are whole:coin'panies that are fondling whose only product is a Facebook

4

Platforin application. That pro'vides an o'pu'or'turiitv"foi'hai> it'provides an:ou6orhinitv foi

5

p'eople who want" to make monev"bv investing in.those:comgani'es„and

Facebook to develop applications iust as

1

,

s'ometh'in''th'at's'ni'ettv exc'itin@'to'h'e'business.comm'unity.

I think tha't's

" (See

7

http: //content. time. corn/time/business/article/0,8599,1644040,00.html)

8

32.

9
10
11

In these public statements to Time Magazine, Zuckerberg made at least four

distinct promises: (1) Facebook would allow developers to build applications

as

ifthey were

developers employed by Facebook; (2) Facebook would offer developers on Facebook Platform a

'ew way of doing business;

(3) Facebook would support an ecosystem where entire companies

12

could be formed whose sole business activity was within the Facebook Platform ecosystem; (4)

13

Facebook would support an ecosystem where investors could reasonably rely on Facebook to

14

make money by investing in companies solely devoted to the Facebook Platform ecosystem.
33.

15

Then on September 17, 2007, Facebook went even further by setting up a $ 10

16

million fund exclusively devoted to providing grants to developers to build on Facebook

17

Platform. Facebook and its partners in the fund would not even take equity in the developer; they

18

were offering free money to build applications on Facebook Platform with the only commitments

19

being that the grantee use the money to build on Facebook Platform and that Facebook's partners

20

would have the opportunity to invest first ifthey were interested in doing so. When asked why

21

Facebook was forming this fund,

22

application ecosvstem.'Bv.'decreasing

23

larger

24

"
Platform. We hope, this is also a funding. model that other. venture eapitahs'ts.will follow. (See

25

http: //500hats.typepad.corn/500blogs/2007/09/facebook-announ.htrnl.)

26

gn oup.of people

34.

it replied: "We'ari" forinirikthis'kind.to-;h'el@.',cow

the.Faceb'ook

the barrier to start a companv, we hone to entice an even

to become;enti epreneur's-and"build 'a'comiiel'lin'i-business':on.'Fabcb'o'ok'.

Facebook's conduct in providing free money to developers to build applications on

it will support developers'pportunity to

27

Facebook Platform implies a specific proinise that

28

"build a compelling business on Facebook Platform" and that it is committed long term to the
14

Case No. CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

that can support substantial investment and where

1

stability of Facebook platform

2

investors who participate in that ecosystem can expect a level playing field upon which to

3

generate a return on that investment.
35.

4

as an ecosystem

Indeed, others were quick to follow Facebook's lead in making investors

of capital. Numerous venture

5

comfortable with supporting this new industry with large sums

6

capital firms or funds were soon after established that invested solely in Facebook applications. In

7

September 2007, Wired Magazine reported the following: "And by turning

8

for new applications, Facebook has launched

9

industiy, just like Bill Gates did with MS-DOS in the 1980s. By allowing developers to charge

a

whole new branch

itself into a platform

of the software

development

system for

10

for their wares or collect the advertising revenue they generate, Zuckerberg set up

11

every programmer to get paid for their efforts. Now venture capitalists like Bay Partners are

12

scrambling to fund almost anyone who has an idea for a Facebook application." (See

https://archive. wired.corn/techbiz/startups/news/2007/09/ff

13

a

facebook? currentPage=all.)

1

14:

36.

As a result of Facebook and its partners tremendous efforts in inducing Developers

t

15

'to build applications on Facebook Platform and promising them the opportunity to build entire

16

industries, new sectors

17

'became, in the words

18

'raffic to Facebook

of investment

and new types

of applications,

Facebook Platform quickly

of AdWeek, "the most viral software distribution system ever". The overall

increased by one third within a mere three weeks

of the

19

December, the Facebook user base had gone from 24 million at the time

20

58

21

22

23,

i

announcement. By

of the

announcement to

million, a'141'/o increase. Where Facebook had been adding about 100,000 new users per day

prior to Facebook Platform, it was now adding more than 250,000 users per day. (See
http: //www.adweek.corn/socialtimes/top-10-facebook-stories-of-2007/211540.)
37.

While it touted Facebook Platforin to Developers around the world, Facebook did

24

not state or imply that access to Facebook Platform might later be rescinded or provided on an

25

unequal basis.

26
27

38.

By the end of 2009, in large part due to the Facebook Platform's success in

inducing developers to make investments in this new ecosystem, Facebook's user growth had

28
15

Case No. CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

skyrocketed from 24 million active users at the time

1

of the announcement of Facebook Platform

in May 2007 to over 350 million users in December 2009.
39.

3

In late 2009, Facebook released

a document

"A Look Back

on the App Economy

4

of Facebook in 2009," in which it cited

5

Playfish was acquired by Electronic Arts that year for no less tlian $ 275 million. Watercooler, a

6

leading fantasy sports application on the Facebook Platform, successfully raised $ 5.5 million to

7

fuel its growth. Weardrobe was acquired by Like.corn for an undisclosed sum. The document,

8

published by the Director

9

you to the developers and entrepreneurs who make up the Facebook Platform ecosystem and

numerous success stories. For instance, Facebook app

of the Facebook Developer Network,

ended:

"We'd like to say thank

congratulations on your accomplishments in 2009." (See

10

http: //web.archive.org/web/20091223055629/http: //developers. facebook.corn/news.php?blog=

1

&

story=351.)

12

IV. FACKBOOK LAUNCHED GRAPES"API IN 2010

13

40.

14

On or about April 21, 2010, Facebook announced the launch

15

Programming Interface ("Graph API") as a key new component

16

developer conference. Graph API allows Developers, with the consent

'1.

of Graph Application

of Facebook Platform
of a I'acebook

at its

user, to read

data from and write data to Facebook.

17
18

Developers can only access Facebook content (referred to as "endpoints") with

19

explicit permission from the user. Examples of endpoints include

20

athletes, or photos.

21

42.

22

'endpoint is the set

Developers even

25,

43.

user's birthdate, favorite

Graph API also permits access to endpoints regarding a user's friends. One such

of photos

',Photos Endpoint" ).

24

a

that a user's friends had chosen to share with that user (the

A user's friends

ifthey are not users

"Friends'3

can control access to their photos and other endpoints by

of the Developer's application.

By granting Developers access to the I riends'hotos Endpoint, Facebook allowed
Facebook user to search the user's friends'hotos

26

Developers to build applications that enabled

27

via a Facebook Platform application, assuming the user's friend explicitly provided such

28

'ermission. A user's friend had

a

complete control over the permission settings. For instance, the
16

Case No.

CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

1

user's friend could provide access to all or no developers or to specific developers but not others,

2

as the

During the announcement of Graph API, Facebook touted several features of

44.

3

4

user's friend saw fit.

Graph API in order to increase its appeal to Developers such as 643.

Specifically, at the F8 Conference 2010, Zuckerberg announced: "The open graph

45.

5

of the web — means that
it

the web can become a set

of personally

6

puts people at the center

7

meaningfully semantic connections between people... Three years ago at our first F8 we launched

8

Facebook Platforin, and together we all started an industry... We think what we have to show you

9

today will be the most transformative thing we'e ever done for the web...Use the open graph.to.

10

'make it.so that! people":ca'n leave'instantly soci'al and per'son'alized.experiences'.ev'er'ywhere

11

We'e

12

the Graph API,—
makes

13

'gdapll.'..impplein'ented;on top'of'aii:open'sfandarii.-" (See

14

and

https://www.youtube.corn/watch? v=4SOcRKINiSM.)

Norma be announcine a few pieces

46.

15

they.go;

of new technology that make this possible —the first is

it completely, simple

t'o read

connections to Facebook's map

of the

After Zuckerberg completed his keynote at F8 2010, Bret Taylor, a Facebook

16

employee, further explained what Graph API meant for developers: "With Graph API every

17

object in Facebook has a unique ID, whether that object is

18

need to download an object with a new ID or download a connection

19

download my friends you just need to download /btaylor /friends... And this applies for every

20;single

a

user profile, event, etc...you just

with a new name.

object in Facebook. So let's say Facebook launches a new feature next year.

gonna make

vou

"do'wnload a.new, SDK, You iust need to download an obiect

connection'.@itli a'n'tv"'na'nic. A11'of'f)le code!you already wrote

will c'ontinue'to".wo'rk

dowiiload

23

'perfectly., This is a really siiJii6cant chaiii~e''fo!r our.net-'platforin that I'rn sure
appreciate. For the first time via the search capability, of the Graph API,

25

'the capability to search over all the public updates on Facebook.

26

bunch

of cool new applicali'ons

27,built our core, of the',Facibook

and

I'm really excited to

We':re:riot'1

with a,new. ID or"

22

a

So to

you'a''4

we'e, giving developers

I think this is Lonna lead to

see where people go

a

with this:;;. We'e

Platform. from the ground up with siniplicitv, stability, and the

28
17

Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction an'd'Damages

maph in mind. This graph that for the first time we'e building to@ether," (See

1

'ttps://www.youtube.corn/watch? v=4SOcRKINiSM.)

2

Facebook's employee Bret Taylor thus promised that: (1) developers can access

47.

3

4

Graph API objects in a simple manner ("you just need to download an object with a new ID"); (2)

5

the accessible objects are ubiquitous ("this applies for every single object in Facebook"); (3) this

6

access

7

will continue to work perfectly... We'e not gonna make you download

8-

Development Kit (or "SDK") is a set

will be

sustained and can be relied upon by developers

("Allof the
a

code you already wrote

new SDK") (a SoAware

of software development tools that allows for the creation of

'applications for a particular development platform); (4) developers can search over all objects for

9

10

all public updates on Facebook; and (5) Fa'cebook Platform guarantees simplicity, stability and

11

your ability to access and help build the graph with us.
48.

12

The software industry uses a common and well-known convention

13

software by version number (e.g., version 1.0, 2.0, etc.) to signify the existence

14

versions

15

announced the launch

of software

and to identify a particular version

of the

of referring to

of separate

software. When Facebook

of Graph API, it did not refer to Graph API as having different versions.

16,Facebook thereby signified that Graph API's open, equal,

of course

and neutral nature would not change.

deliberate decision on Facebook's part to continue to entice

17

This representation was

18

developers by conveying a sense

19

applications on its revolutionary platforin.

20,

49.

.

a

of security

around investing time, money and effort building

Facebook did not represent that

21

of Graph API. To the contrary,

22

it had

reserved the right to terminate any endpoint

API.
50.

23

24

Facebook repeatedly expressed its long-term commitment to this

This extension of the Facebook Platform ecosystem to further expand its

'eorganization potential for the entire Internet contributed

even further to Facebook's meteoric

25

rise and induced even more investors and developers to expand the industry Facebook had

26

created.

27

Caufield

28

Facebook Platform. By September 19, 2011, Facebook Platform had created over 182,000 jobs

By way of example, on October 21, 2010, Facebook partnered with Kleincr Perkins
8c

Byers, Zynga and Amazon to launch

a $ 250

million fund to invest in new

apps on the

18

Case No.

CIV 533328

Plaintiffs

Second Amende'd Complaint for Injunction and Damages

and $ 12.19 billion in value to the U.S. economy. Facebook now boasted over 850 million users as

of late

2

2011.
51.

3

On September 24, 2011, Facebook further extended its long-term commitment to

of the

disparate

4

Facebook Platform by expanding Open Graph to accelerate its reorganization

5

content on the Internet. (See http: //mashable.corn/2012/05/24/facebook-developer-platform-

6

infographic/¹fDCxuACag5qr.) In his keynote address at F8 2011 on Septeinber 24, 2011,

7

Zuckerberg stated to a packed auditorium

8

.depth

9

2007 in our very first F8:I.introduced the concept

of engagement

of developers: "The next

era is defined:bv the apps and

ih'at.is now possible now that this whole network'has.been established... In

of the

social graph. all

10,between..pc'o'pl'e in the.C'orld;, Last-'year. we intr'odu'ced'.th'c c'oncep't

of the relationships

of theopcn.griiph

as:no't only

11

the m'ap o'f''all: tlie'relNfiori'ships':but:all'of'the'connections in the world....: This"ye'ar We'r'e takin'g

12

the next step: we',re going to make it so that. you can, connect to 'aiiy'thin'g.you want in any way

13

you w'ant;..; ..So'm'ctim'cs.I think about what we're'doingwith the: open" gripli'is-heipiii'g"to'efiiie.a

14

brand new language for how people connect...every year we take the next step.and make.soTY}e

15

iie'w s'ocial!appkjxi'ssib'le; op'en~eaph enable&apps 'that fo'cus'pr'iniarilv-on.two,:.types

16

the:first'is.'foal'ling out your:.timeline, and the second:is"helpirig'yoii discovci.ncw',things'.tlir'ough

17

your-,: friends;:"

52.

18

ofthings-:

Facebook thus made at least four distinct promises in this September 24, 2011

19

announcement: (1) Facebook has a long-terin commitment to the Facebook Platform and ensuring

20

a

21

Facebook is committed to extending the Facebook Platform to provide developers with more

22

ways to innovate and build businesses; (3) in keeping with this long term commitment, Facebook

23

.

fair playing field for developers and has had such

will continue to help make new kinds of social

a

commitment for over four years now; (2)

apps possible; and (4) Facebook is

in particular

24: focused on helping you discover new things through your friends and Facebook Platform will

26

'3.

27

and the open, equal, and neutral nature

25

enable developers seeking to do so.
643 relied upon these representations, and others, as to the fair, level playing field

of Facebook's Piatforin

and Graph API, and invested

19

Case No.

CIV 533328

Plaintiffs Sccorid Amended Complaint for Injunction and Damages

considerable time, energy, and money developing an application to make use

of Graph API on

Facebook's Platform.

2

V.,THE FTC ORDERED FACKBOOK NOT TO MISREPRESENT THE MANNE<R
IN WHICH FACEBOOK PROVIDES ACCESS TO USER. DATA
54.

5

On or about July 27, 2012, the United States Federal Trade Commission ("FTC")

entered a Decision and Order (the "FTC Order" ) against Facebook.
55.

7

The FTC Order entered following a consent agreement between FTC and

Facebook.

8

56.

9

The FTC noted in the FTC Order that the FTC had reason to believe Facebook has

violated the Federal Trade Commission Act.

10

57.

11

The FTC Order provided, among other things, that Facebook and its

representatives "shall not misrepresent in any manner, expressly or by implication, the extent to

which it maintains the privacy or security of covered information...."

13

14,

58.

The FTC Order defined "covered information" to include an individual

consumer's photos, among other things.
59.

The FTC Order also provided that Facebook and its representatives "shall not

,misrepresent in any manner, expressly or by implication... the extent to which [Facebook]
'makes or has made covered information accessible to third parties."

18

VI.INDECEMBER..2012..PLAINTIFF 643 BECA'ME:A.FACKBOOKDEVELOPER

19

AND BE'GAN.DEVELOPING AN.APPLICATION .

20
60.

21

In December 2012, 643 entered into the Facebook Developer Platform, which

permitted 643 to develop applications using the Graph API.
61.

643 has developed a unique automated image classification capability, which

it

used to develop an application called Pikinis ("the App"). The App was available for download

24,

on any iOS-compatible device, including the iPhone and iPad. The App enabled Facebook users
to reduce time spent searching by automatically classifying photos that their friends have shared

with them through Facebook's network, assuming their friends have provided such permission to

27
28

i

Developers.
Case No.

CIV 533328

Plaintiffs

20
Second Ame'nded Complaint for Injunction and Damages

The App required use

62.

1

of Facebook's Graph API, and specifically the Friends'

Photos Endpoint. The App used 643's pattern-recognition technology to search through shared

photos and identify those

3

at the beach or in the summer.

The App could only be used to sort through photos that a user's friend had chosen

63.

4

of their friends

5

to share with that user based on the friend's Facebook privacy settings. 643 conducted initial user

6

research that indicated considerable consumer demand for the App, among both men and women.

7

Facebook has never expressed any disapproval

8

content already available on Facebook.

of the App as the only content it accesses

9

64.

643 made plans to market and promote the App to attract users.

10

65.

643 sold the App for $ 1.99 in Apple's App store. The basic version

is

:

allowed a user to run a certain number

of searches per month. In addition,

of the App

users could choose to

12

pay for premium access, which allowed unlimited searching. 643 offered different pricing tiers

13

for premium access, ranging from $ 1.99 for a monthly subscription, to $ 6.99 for 6 months, to

14

$ 9.99

15

for

12 months.

Facebook benefits from the work of Developers such as 643 who create

66.

.

16

applications for use with Facebook. These applications can enhance user experience and drive

17

traffic to Facebook's website and mobile app, which in turn generates revenue for Facebook

18

through advertising sales, its primaiy revenue stream. It is no secret that Facebook's'meteoric rise

19,from 24 million users in 2007
20
21

release and growth

to almost 1.6 billion users in 2016 rested in significant part on the

of Facebook Platform.

VII. FACEBOOK RE-ITERATED ITS.PROMISES'RELATED TO GRAPH API
AND FACKBOOK PLATFORM AT ITS 2014 FS CONFERENCE

22
67.

The extension

of the Graph API at F8

2011 was simply the next step in Facebook's

23

24

long term commitment to serve
statement and action

25

shadow
26
27
28

it took

as a

platform for other developers, a commitment that every

since May 2007 (a period

of a doubt. The extension of the

of well over 4 years) reaffirmed without a

Facebook Platform continued to accelerate the massive

economy Facebook had built. By January 2012, Facebook Platform had created 232,000 jobs in

'he EU alone,

amounting to $ 15.3 billion of value to the European economy. By February 2012,
21

Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

1

250 million people were playing games on Facebook Platform each day (that is 12 times more

2

people than the average viewership

3

television). By April 2012, 7

4

Facebook Platform. (See http: //mashable.corn/2012/05/24/facebook-developer-platform-

5

infographic/¹fDCxuACag5qr.) It should be noted, in large part due to its long-term commitment

6

to the Facebook Platform, Facebook exceeded

8

'acebook

9

hundreds

10 highest grossing apps

1

in the Apple App Store werc built on

billion users in 2012.

By April 30, 2014, at the 2014 F8, having accumulated over

68.

7

of the

of American Idol, the highest-rated TV show in the history of

decided that certain parts

of thousands of developers

of this massive application
and billions of dollars

ecosystem

1.3

billion users,

it had built (along with

of outside investment capital) were

10

better kept to itself. Despite having made this decision, Facebook made numerous promises that it

11

explicitly never intended to keep. Zuckerberg announced during his keynote: "This is gonna be

12

different kind of F8. In the vast

13,new

we'e

had F8 w'hen

we'e

a

bad a big product announcement or

direction we'were'Coins~ in.. This:alwavs:meant a lot of different chances-for vour alps.,Now

14

we'e

15

busii~'e'sscs;:

16

different':th'inzm were doinz to sunnott'-vou. %c'vc.heard:froin'. You'.that vou''w'aint'.to iae Faceboolc

17

Platform to do
69.

18
19

A'nd w'o want to brihi~ this':.community.toietlier onc'e ver"vcar.t6'tall< about:all'the

3

.

things. Help vou build, mow and monetize vour alps.."

Thus, Zuckerberg reiterated the promise that Facebook had expressed to

developers unequivocally for over seven years now: that Faccbook is committed in the long term

20,to
21

focused on building a stable'mobil'e platform; You'rc'trvin'e to:build meat:-mobile:apns'and

helping them build, grow and monetize their apps.
70.

Zuckerberg continued: '!As I said'we'.re reall'v.'focused:on', building';a stable"mobile

built on top of the

22

platform. And one thing vou mav not know, is tliat all of our mobile

23

.verv same platform and APIs that vou,guvs use when vou're writing Facebook and all our

24,engineers

a@vs axe

use the same tools and read all the same documentation that vou do.... It's reallv.

25

.i'mpo'rtant,for vou"an'd for all''of our teams internallv.fhat w'e"build.stable and.,cffici'ent

26

'in&astructure.tlult vou can rely on for the

27

want to start today bv going through a few thini~s

28

stable and reliable for vou to build, grow and monetize your apps, You want to be able to build
22
Plaintiffs Second Amended Complaint for Injunction and Damages
Case No. CIV 533328

long~

term. So tlus:has been areallv'big focus for us.... I

we'e doine

to make our platform even more

we'e

1

somethine and know that it's Lonna be able to work for a while. So todav for the first time

2

introducing a 2-'vear.stabilitv puarantue for- all. of our. core API platforms...so even

3

these core APIs in the future. we're:i~uaranteeing that

4

for at least two years and maybe longer from the time we make that'.change; We'e still.gonna

5

'experiinent with new features and diffeicist:thihes but wc're':iioi>na''mark them

6

know what's gonna be'gait.of this core stable platform. We'e also introducing API versioning

7

This is something we want to make sure that all the apps we wrote two'vears,'apo keen workinp.

8

Th'is is sonfcthi~ii" w'e w'an'te'd.in'teinallv'as we"build;6n.'this.ulat'form,.so'isow eVerythiiij~ is gonna':

9

be versioned so vou set to decide which version

of the API.vou.get

keen supporting them as is

as beta'so

vou

to build against."

Accordingly, Zuckerberg made at least four promises that: (1) Facebook continues

71.

10

we'e going.to

ifwe chango

to provide a level playing field to developers where developers use the same tools as Facebook

employees to develop apps; (2) Facebook continues to be committed in providing developer

12

for all of its core API

13

'access "that you can rely on for the long term"; (3) Facebook promises that

14

endpoints

15

promises that

16

'it introduces API versioning ("This is something we want to make sure that all the apps we wrote

17

two years ago keep working. This is something we wanted internally as we build on this platfoiin,

18

so

19

build against.").

it will guarantee their stability for no

choose which version

of the API they would like to access

as

now everything is gonna be versioned so vou'e~t:to d'ee'ide which version of the API you get to

72.

20

it will let developers

less than two years going forward; (4) Facebook

Many developers initially applauded Zuckerberg's 2-year stability guarantee and

of the API to build against.

21

the ability to let developers choose which version

22

applauded Facebook's commitment to developers in noting: "Facebook co-founder and CEO

23

.

One blogger

'Mark Zuckerberg announced a two-year stability guarantee for all of the company's core APIs

will now be versioned,

24

and platforms. In fact every API launched by Facebook

25

will be able to

26

http: //thenextweb.corn/facebook/2014/04/30/facebook-announces-two-year-stability-guarantee-

27

core-apis-sla-fix-major-bugs-within-48-hours/¹gref ) TechCrunch and many other bloggers also

28

reported on the API Guarantee, stating that developers

and developers

choose which version to build on." (See

"willbe able to build with confidence

23

Case No.

CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

core API will be available for at least two years". (See

1

knowing that

2

http: //techcrunch.corn/2014/04/30/facebook-api-guarantee/.)

a

TlIL<"NIMPLEMENTED POLICIES THAT DEPARTED
VIII.,FACKBOOK
AT
,RADICALLYFROM ZUCI<KRBKRG'8;ANNOUNCKMKNT FS 2014

73.

Unfortunately for the Developer community, Zuckerberg's announceincnt directly

5

contradicted the policy that Facebook immediately began implementing that very day.
6

Zuckerberg's statement that Developers, like Facebook employees, would be able to choose
7

which API to use was simply false, and he must have known this statement to be false at the time
8

he made

it as only hours later Facebook

sent Developers a notice that the Graph API they had

9
10

come to rely on and upon which Facebook had enticed them to invest billions of dollars around
was to be permanently retired in one year. Zuckerberg explicitly omitted and contradicted the

11

one-year lifespan

of Graph API during his keynote

address. But given that Zuckerberg's

12

announcement and the notice to developers occurred on the very same day, Zuckerberg must have
13

known of this change while making his statements and approved

of such

changes in advance.

14

74.

Moreover, the 2-year stability guarantee turned out not to apply to the original

15

16
17

Graph API and only to future APIs. Thus Facebook pulled the rug out from under the Developer

community and took full econoinic advantage of the ecosystem Developers had built, but
Zuckerberg's keynote address still generated sound bites consistent with his previous

18

representations that Facebook was maintaining a fair and level playing field for Developers.
19

20

Zuckerberg was forced to make statements he knew at the time to be false precisely because it
was obvious to everyone in the developer community, especially Zuckerberg, that Facebook had

21

22
23

24

for seven years been making clear and unambiguous promises to developers that they could rely
on Facebook Platform over the long term to provide a fair playing field and to enable developers
to build businesses.
75.

25

26
27
28

Finally, Graph API explicitly removed endpoints that were of high value to

Developers, like the ability to access Photos, which for years Facebook had touted as one

of its

most valuable and highly trafficked features in order to entice developers to build applications.

Facebook's only justification for removing access to photos was that this endpoint was "rarely
Case No.

CIV 533328

Plaintiffs

24
Second Amended Complaint for Injunction and Damages

1

used", which contravenes every public stateinent Facebook had previously stated for over seven

2

years in which Photos were consistently touted as its

3

engagement, an application that captured more photos and traffic than the next three photo sites

4

on the Internet combined.

5

76.

Facebook's behavior

¹I application

and driver

of intentionally inducing Developers

of user

to build Facebook's

6

business and then pulling the rug out from under them is a repeated pattern in Facebook's growth

7

stoiy. It is not an isolated incident simply related to Graph API versioning and the thousands of

8

developers, like 643, whose businesses were destroyed by this bait and switch tactic.

9

77.

As an example, Facebook recently executed another bait and switch tactic that

of Developers to go out of business

and lose countless millions of dollars

of

10

caused thousands

11

enterprise value and capital investment.

12

Developers using photos and other endpoints in the Graph API at F8 2014, he also announced

13

Facebook's acquisition and reliance on Parse as its new preferred tool for developers to build on

14

Facebook Platform. Parse was a popular development platform for creating applications for

15

Facebook, which handled much

16

Developers to focus on features that matter to users. Zuckerberg stated in the same keynote where

17

he announced the Graph API 2.0: "One

18

Parse...We make it easy to focus on your app, the thing that will get you users and make you

19

money...and Parse takes care

20

stage went on to note that they had expanded the free tier to make

21

giving developers "unlimited requests, unlimited recipients, free analytics". Zuckerberg then

22

finished his thoughts on Parse by saying

23

hope that it does get huge."

24

78.

At the

same time that Zuckerberg pulled the rug out from

of the back-end functionality of such applications, allowing
of the'things we'e really excited

of all the rest." A Facebook

about offering is

employee who followed Zuckerberg on

it easier to grow on Parse,

"We'e excited, we'e aligned with your app,

and we

As a result of this and many other similar statements and actions by Facebook,

of thousands of Developers

began using Parse to build applications on Facebook

25

hundreds

26

Platfoim. Parse's platform on Facebook states: "From startups to the Fortune 500, hundreds of

27

thousands

of developers trust us."

28

25
Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

79.

1

Then, abruptly, on January 28, 2016, Facebook announced that Parse would be

difficult announcement to make. Beginning today wc're winding

2

shutting down: "We have

3

down the Parse service, and Parse will be fully retired after

4

28, 2017.

5

we need to focus our resources elsewhere." The statement continues: "We understand that this

6

won't be

7

striving to make this transition

8.
9

.

a

We'e proud that we'e

an easy

80.

a

year-long period ending on January

been able to help so many

of you build great rnobilc apps, but

transition... We know that many of you have come to rely on Parse, and we are
as

straightforward

as

possible."

Many developers immediately commented on the devastating effect this would

have on their app, business and investment in the Facebook Platform. One developer wrote:

10

"@Parselt Wow... Have spent months optimizing my app with your service to launch soon, and

11

now this... Seems sudden... ¹utterlydisappointed." Another: "@Parselt it would be nice to hear

12

little bit more about the need to focus your resources elsewhere." "@ParseIt my app had 2.5M

13

users on your platform...this is sickening."

14

81.

The incident with Parse demonstrates

a

a

continued clear pattern on the part of

15

Facebook to make clear and unambiguous promises to developers, to engage in conduct that

16

induces developers to make substantial investments

17

Facebook one

18

think that it can violate these promises with impunity the moment it becomes convenient for them

19

to do so.

20

of the most

of time and money

(a11

of which helped

make

valuable companies in the world today), and then Facebook seems to

IX. PLAINTIFF 643'.RECEIVED NOTICE FROM FACEBOOK THAT ITS APP
WOULD NO'LONGER EUNCTION

21

82.

22
23

24

On January 20, 2015, Facebook sent an email to 643 stating that 643 must

"upgrade" the App to Graph API v. 2.0 by April 30, 2015. The email stated that Facebook would
end third-party access to the

Friends'hotos Endpoint on April 30, 2015. The App will not

function at all without access to the Friends'hotos Endpoint, so Facebook's suggestion that 643
25

26

"upgrade" the App to Graph API v. 2.0 was not possible.
83.

27
28

By deciding to end access to the Friends'hotos Endpoint, Facebook has made it

impossible for 643 to continue to operate the App, to abide by the license agreements and
26
Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

1

purchase terms entered into by 643 with its users, and for 643 to recoup any

2

of its investinent of

capital, huinan labor, time, effort, and energy.
643 has sold approximately 5,000 copies

of the App since

its beta launch.

3

84.

4

substantial portion

of App users

5

full public launch

result

6

85.

Each one

7

86.

Facebook requires Developers to enter into license agreements with users

as a

A

have paid for premium access. 643 was not able to execute its

of Facebook's

of the. App users

decision.

entered into a license agreement with 643.

of

8

applications for Facebook. These license agreements must, among other things, require that the

9

users

87.

10
11

of these applications

adhere to Facebook's terms

of service.

Accordingly, Facebook knew, or had reason to know, about the existence of 643's

license agreements with its users.
88.

12

Had Facebook refrained from ending access to Friends'hotos Endpoint, 643

13

could have quickly begun to generate hundreds

14

of thousands of dollars of revenue

on a monthly

basis.

15

89.

In total, 643 expended approximately

16;labor by its team
17
18

19

90.

$ 1.15

million in capital and uncompensated

members in developing and marketing the App.

643 attended Facebook events for Developers and made known the harm caused

verbally and via email to the appropriate Facebook employees.
91.

Faced with the imminent loss

of its investment,

643 wrote to Facebook on March

Friends'hotos

20

16, 2015, and informed Facebook that its decision to discontinue access to the

21

Endpoint would harm 643 in several ways. 643 informed Facebook that it had reasonably relied

22

on Facebook's representations that the endpoints would remain open, and that Developers would

23

.have an equal opportunity to integrate applications into the social graph.

24
25

26

92.

643 requested that Facebook continue to permit Developers to have access to the

Friends'hotos Endpoint.
93.

643 alerted Facebook to the considerable harm

it would suffer should

access be cut

27

off. 643 also noted that some of its users had entered into subscriptions that extend beyond the

28

.April 30, 2015, cut-off date, and that these users could be entitled to refunds of their purchases.
Case No.

CIV 533328

Plaintiffs

27
Second Amended Complaint for Injunction and Damages

94.

Thus Facebook had actual knowledge

of the contracts

643 had entered into with its

of the prospective economic relationships

2

users. In addition, Facebook had actual knowledge

3

643

expected with its users, as well as Facebook users generally.

4
5

6
7
8

9
10

95.

On or about April 30, 2015, Facebook did end access to the Friends'hotos

Endpoint.
96.

As a result

of Facebook ending

access to the

Friends'hotos Endpoint, the App no

longer functions.
97.

On information and belief, Facebook has been working on its own applications

'using image recognition.
98.

On June 15, 2015, less than two months after closing access to the Friends'hotos

11

Endpoint for Developers, Facebook announced the launch of "Moments," which allows users to

12

"sync" photos they have taken with their friends and, using Facebook's facial recognition

13

soAware, allows users to search photos that their friends have shared with them. See

14

http: //newsroom.fb.corn/news/2015/06/introducing-moments/

(last accessed October 27, 2015).

99.

Instagram is an on-line photo sharing service that Facebook acquired in 2012.

100.

15

In June 2015, just two months after Facebook closed access to the Friends'hotos

17

Endpoint, Instagram announced enhancements to its Search and Explore features, which allow

18

users to search through photos that have been shared

19

101.

On information and belief, in addition to 643, other Developers have been

20,adversely impacted by Facebook closing
21

22

with that user on Instagram.

access to certain endpoints

of Graph API, including

'riends'hotos.
102.

On September 21, 2015, the Wall Street Journal reported that Facebook's decision

23

to restrict access to Graph API has caused a drug addiction researcher to halt his research efforts,

24

shut down a voter-registration tool used by the 2012 Obama campaign, and decommissioned an

25

app designed to help first generation college students connect with one another. Deepa

26

Seetharaman % Elizabeth Dwoskin, "Facebook's Restrictions on User Data Cast a Long Shadow;

27

Curbs disrupt startups, academic research and even political strategy"," THE WALLSTREET J.,

28
28
Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

Sept. 22, 2015, at B1 (available at

2
3

http: //www.wsj.corn/articles/facebooksrestrictionsonuserdatacastalongshadow1442881332).
The Wall Street Journal also reported in the same article that Facebook reached an

103.

4

unspecified compromise with dating app Tinder that permitted some form of access to photos

5

mutual friends.

6

Facebook has not offered 643 a coinprornise that would permit the App to function

104.

ifFacebook

were to make such an offer, the harm to 643 is irreparable

7

and even

8

members have moved on to new employment and its code has been

9

Instead, the only proposed teclinical

105.

10, searchable

of

cache

as

its team

fully retired.

"fix"by Facebook

was to create an offline,

of Facebook's users'hotos. But this solution (1) on its face violates

Facebook's own terms, (2) would not permit the App to function

it had

as

originally intended and in the

been, and (3) could result in a grave and substantial abuse

of user trust,

12

same manner

13

violate user privacy, and gut the core principle of an individual's ownership and control

14

own data.

15

of their

Facebook did not terminate access to the Friends'hotos Endpoint for the purpose

106.

it

16

of enhancing

17

took these actions for the purpose of improperly monopolizing for itself the ability to access the

18

data previously accessible through the

19

and to create applications based on those data. As a result

20

control over this data. They are not permitted to share it with other applications they trust but only

21

.with Facebook.

22

107.

user privacy, as users already possessed complete control over such data. Instead,

In sum, Facebook acts

Friends'hotos Endpoint

as a

and other terminated endpoints,

of these

actions, users now have less

platform when it wants to exploit Developer creativity

it wants to secure

23

and resources, and a monopolist when

24

of the

ecosystem for itself once

developer creativity and resources have been invested.

25

108.

areas

As set forth above, Facebook made repeated, clear, and unambiguous promises
period

of more

than seven years, and

26

upon which many developers, including 643, relied, over

27

which were broken by Facebook. These broken promises directly and substantially harmed 643,

a

28

29
Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

nullifying its investment of time and money and making it impossible to generate revenues and
2

profits.

3.

109.

Facebook deliberately baited, induced, and enticed (through countless promises in

4

both words and conduct) developers to help turn Facebook from a website that had raised

5

million and secured 24 million users to a company that is now one of the most valuable

6

enterprises in the world.

7

$ 37

COUNT I: VIOLATIONOF BUSINESS AND PROFESSIONS:CODE~'85.1 7200 et sea.
[Against all Defendants]
through 109

though set forth fully

110.

643 re-alleges and repleads paragraphs

111.

Facebook's representations and conduct were designed to, and did, entice 643 and

1

as

9

herein.
10

other Developers to create applications for Facebook with promises of, ainong other things, a
12
13

14
15

16
17

level playing field, fair competition, and a chance to build a business. Facebook decided to open
'certain endpoints, and not others, precisely to induce developers to build certain types

of

applications, including advanced photo-searching applications. Facebook promised Developers
that their own advanced photo-searching applications would be treated on a level playing field

with any photo-searching applications Facebook decided to launch in the future. Facebook also
promised developers it was committed over thc long term to enable Developers to build

18

businesses using advanced photo-searching applications.
19

112.

Facebook caused substantial harm to 643 and other Developers when it then

20

decided to terminate

Developers'bility to build advanced photo-searching applications, while

21

retaining its own ability to create these kinds
22

because 643, like other Developers,

had invested considerable time and resources in developing this kind

23

113.

24

of applications,

of application for Facebook.

The efforts by 643 and other Developers helped to drive user adoption

of

Facebook by enhancing user experience, thus creating substantial additional revenue and user

25
base for Facebook's benefit.

26
114.

27

In addition, Facebook took advantage

of the market

research and development

efforts by 643 and other Developers, which proved that advanced photo-searching applications

28
30
Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

of the most attractive

markets to help Facebook grow

1

represented a massive market, perhaps one

2

its revenues going forward,

3

own photo searching application (see "Facebook Moments is a Smarter Photo App —Much

4

Smarter, in Wired Magazine, June 15, 2015, http: //www.wired.corn/2015/06/faccbook-

5

moments/).
115.

6

as

evinced by Facebook's recent announcement

of "Moments", its

Facebook's decision to end access to the Friends'hotos Endpoint does not

7

enhance user privacy because the App could only sort through photos that had already been

8

shared

9

any, developers were permitted to access their photos.

10

with the App user and the App user and the user's friends had full control over which,

116.

Instead, by ending Developer access to the

has monopolized
12
13

14
15
16

17

if

Friends'hotos Endpoint, Facebook

for itself the ability to create applications capable of searching or sorting photos,

which harms consumers, Developers, and competitors.
117.

No countervailing benefits to competition or consumers stemming from

Facebook's representations and conduct exist.
118.

The harm to 643 and other Developers by Facebook's representations and conduct

outweighs the reasons, justifications, or motives for the representations and conduct by Facebook.
119.

643 could not have reasonably avoided its injury because Facebook only

18

announced its decision to terminate access to the Friends'hotos Endpoint after 643 had made

19

considerable investment and Facebook had approved the App.

20
21

22
23

24
25

26

27

120.

643 also requested that Facebook not end access to

Friends'hotos Endpoint, but

Facebook did not change its decision.
121.

Facebook's actions thus constituted an unfair business practice under California's

Unfair Business Practices Act.
122.

Facebook's decision to end access to the Friends'hotos Endpoint was also

unlawful.
123.

In taking the actions alleged herein, Facebook acted with fraud, malice and

oppression, and in reckless disregard

of the rights of 643.

28
31

Case No.

CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

124.

1

2

of its investinent in developing
125.

3

4

of Facebook's actions, including the

643 suffered substantial injury as a result

loss

the App and lost revenue.

Accordingly, Facebook is liable to 643 for violation of California's Unfair

Business Practices Act.
126.

5

As

a

proximate result

of the

acts and conduct

of Facebook herein

alleged, 643 has

6

found it necessary to engage attorneys, and incur attorney's fees, and will continue to incur

7

attorney's fees, in an unascertained ainount to be established according to proof following the

8

conclusion

of trial.
COUNT II: PROMlSSORY ESTOPPEL,
[Against all Defendants]

10

through 126

127..

643 re-alleges and repleads paragraphs

128.

though set forth fully

Facebook clearly and unambiguously promised that:

1

as

herein.
12
13

a.

Developers would be able to integrate their applications into Faccbook's social

14

graph;
15

b. Developers would have the same access to integration

of their applications

as

16

Facebook;
17

c.

Developers could easily access Graph API objects;

d.

Facebook would suppoit Developers in achieving mass distribution

18

of Developer

applications;
20
e.

Facebook would provide adequate tools for developers to build their applications;

f.

Developers would be able to build a business on Facebook Platform;

g.

Developers would be able to monetize their applications on Facebook by selling

21

22
23
ads on their application pages;

24
h.

Developers would be able to build applications on a fair, level playing field;

i.

Developer applications would not be "second class citizens" compared to

25

26

Facebook's own applications;
27

32
Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

j. Developer applications that compete with Facebook applications would be
welcome; and
k. As long as Developer applications abided by Facebook Terms
Facebook
129.

5

6

will be neutral

as

of Service,

to these applications.

643 invested considerable capital, labor, time, and effort into developing the App

in reliance on these promises.
130.

643's reliance was reasonable because Facebook had consistently made these

it could prevent Developers from

8

representations for seven years without ever stating that

9

building the specific kinds of applications Facebook was enticing them to build all along.
131.

643's reliance was foreseeable by Facebook.

132.

10

643 was injured as a result

of its reliance

on Facebook's promises, which

12

Facebook did not keep, in an unascertained amount in excess

13

of $ 25,000.00,

to be established

according to proof at trial.
133.

14

Accordingly, Facebook is liable to 643 for damages.

.COUNT III: NEGLIGENT MISREPRESENTATION
[Against all Defendants]

15

134.

643 re-alleges and repleads paragraphs

135.

through 133 as though set forth fully

Facebook represented that

1

17

herein.
18

19
a.

Developers would be able to integrate their applications into Faccbook's social

20

graph;

2]
b.

Developers would have the same access to integration

of their applications

as

22

Fac cbook;
23
c.

Developers could easily access Graph API objects;

d.

F acebook would support Developers in achieving mass distribution

24

of Developer

25

applications;
26
e.

Facebook would provide adequate tools for developers to build their applications;

f.

Developers would be able to build a business on Facebook Platform;

27

.33

Case No.

CIV 533328

Plaintiffs

Second Amended Complaint for Injunction and Damages

g.

1

Developers would be able to monetize their applications on Facebook by selling
ads on their application pages;

h.

Developers would be able to build applications on a fair, level playing field;

i.

3

Developer applications would not be "second class citizens" coinpared to
Facebook's own applications;

j. Developer applications

6

that compete with Facebook applications would be

welcome; and
k. As long as Developer applications abided by Facebook Terms

8

Facebook
10

136.

will be neutral

as to these

of Service,

applications.

Such representations were untrue, because Facebook later claimed that

it had

retained for itself the right to terminate the Friends'hotos Endpoint, and did close the

Friends'2

Photos Endpoint to Developers, while Facebook kept for itself the ability to develop applications
13

that access photos.

14

137.

15

16
17

Regardless

of its actual belief, Facebook must

have made those representations

without any reasonable ground for believing the representations to be true.
138.

Facebook conveyed the representations in a commercial setting for a business

purpose, namely inducing Developers to develop applications for Facebook.

18

'39.

19

including 643, to develop applications, including the App, that used the Friends'hotos endpoint,

20

thereby adding features to Facebook, enhancing Facebook's functionality and user experience,

21

and generating more revenue for Facebook.

22
23

24

140.

Facebook made those representations with the intent to induce Developers,

643 was not aware that Facebook's representations were false, and 643 developed

the App in reliance on the truth
141.

of Facebook's

representations.

643's reliance on the truth of Facebook's representations was justified because

25

Facebook had consistently made these representations for seven years without ever stating that it

26

could prevent Developers from building the specific kinds

27

them to build all along.

of applications Facebook

was enticing

28

34
Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

643 was injured as a result

142.

2

unascertained amount in excess

of $ 25,000.00,

on Facebook's representations, in an

to be established according to proof at trial.

In taking the actions alleged herein, Facebook acted with fraud, malice and

143.

4

of its reliance

oppression, and in reckless disregard

of the rights of 643

Accordingly, Facebook is liable to 643 for damages.

144.

CONTRACT.,
COUNT IV: INTENTIONAL'INTE<RF<ERKNCE.WITH
[Against all Defendants]
through 144 as though set forth fully

145.

643 re-alleges and repleads paragraphs

146.

643 had entered into license agreements and subscriptions for premium access

1

herein.
10

with its users.
11

of these

147.

Facebook knew

148.

Facebook intentionally interfered with and disrupted these contracts when

license agreements and subscriptions.

12

it stated

that it would end 643's access to the Friends'hotos Endpoint on April 30, 2015, despite

knowing that interference with these contracts would be certain or substantially certain to occur
as a

result

of Facebook's

act in ending 643's access.

16

149.

Facebook further intentionally interfered with and disrupted 643's contracts with

17
'1
its users when it did terminate 643's access to the Friends'hotos Endpoint on Apll 30 2015

18

despite knowing that interference with these contracts would be certain or substantially certain to

occur as

a

result

of Facebook's

act in ending 643's access.

20
150.

643's contract with its,users was thereby disrupted by Facebook.

151.

As

21

excess

a

result, 643 has suffered and

of $ 25,000.00

will suffer damage in an unascertained amount in

to be established according to proof at trial.

23

152.

In taking the actions alleged herein, Facebook acted with fraud malice and

24

oppression, and in reckless disregard

of the rights of 643.

25

153.

Accordingly, Facebook is liable to 643 for damages.

26
27
28
35

Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

COUNT V: INTENTIONALINTERFERKNCK WITIX
PROSPECTIVE BUSINESS RELATIONS
[Against all Defendants]
154.

4
5

643 re-alleges and repleads paragraphs

155.

643 had an expectation

1

through 153

as

though sct forth fully

herein.

of economic benefit from third parties, including its users

6

who downloaded the App and other Facebook users who may have downloaded the App if643

7

had marketed the App as

Facebook knew

156.
9
10

it planned.

of 643's

relationship with the users

of the App, and knew of 643's

plans to market the App.

Facebook intentionally disrupted these relationships when

157.

it announced that it

11

would end 643's access to the Friends'hotos Endpoint on April 30, 2015, despite knowing that

12

interference with these relationships would be certain or substantially certain to occur

13

of Facebook's

14

158.

as a

result

act in ending 643's access.

Facebook further intentionally interfered with and disrupted 643's relationships

15

with its users when it did terminate 643's access to the Friends'hotos Endpoint on April 30

16

2015, despite knowing that interference with these relationships would be certain or substantially

17

certain to occur as a result

18
1

9

20
21

159.

24

643's relationship with its users was thereby disrupted, and will be further

160.
$ 25,000.00

As a result,

643 suffered dainage in an unascertained amount in excess

In taking the actions alleged herein, Facebook acted with fraud, malice and

oppression, and in reckless disregard
162.

of

to be established according to proof at trial.

of the rights of 643.

Accordingly, Facebook is liable to 643 for damages.

JURY. TRIAL DEMAND.

25

26

act in ending 643's access.

disrupted.

161.
23

of Facebook's

163.

643 demands a trial by jury on all claims so triable,

27
28
Case No.

CIV 533328

Plaintiffs

36
Second Amended Complaint for Injunction and Damages

PRAYER FOR RELIEF
WHEREFORE, Plaintiff 643 asks this Court to enter judgment against Defendant
3

Facebook, Inc., as follows:

A.

4
5

A judgment or order declaring Facebook's conduct,

as alleged,

unlawful under

California's Unfair Business Practices Act;

6

B.

A judgment, order, or award of damages

7

C.

A permanent injunction prohibiting Facebook from removing Developer

8

9
10

the

Friends'ser
D.

adequate to compensate 643;
access to

Photos Endpoint;

A permanent injunction prohibiting Facebook from interfering with 643's

contracts or prospective business relations;

11

E.

An award of its reasonable attorneys'ees and costs;

12

F.

Punitive damages and/or treble damages

13

14

as

provided by California's Unfair

Business Practices Act; and
G.

Such other further relief as this Coute or a jury may deem proper and just.

15

16,Dated: February

26, 2016

CRITERION LAW

BIRNBAUM& GODKIN, LLP

17
18

19

Basil P. Fthm<6; Esq.':
David S. Godkin (admitted pro hac vice)
Andrew A. Caffrey, III (admitted pro hac vice)
Attorneys for Plaintiff
Six4Three, LLC

20
21

22
23

24
25

26
27
28

37
Case No.

CIV 533328

Plaintiff's Second Amended Complaint for Injunction and Damages

EXHIBIT
EXHIBIT 1

f8 Event and Facebook Platform FAQ

What is f8?
f8 was an event held at the San Francisco Design Center on May 24, 2007, during which Mark Zuckerberg
unveiled the next evolution of Facebook Platform. The event included an eight-hour "hackathon," where both
Facebook engineers and outside developers collaborated on building new applications on the new Facebook
Plafform.

What is a "hackathon"?
A hackathon is an all-night coding event during which Facebook engineers work on any project that interests
them. Facebook uses the word "hackathon" to refer to a gathering of engineers, who possess technical expertise
and collaborate on innovative projects. Facebook has a tradition of holding frequent developer hackathons, which
have spawned some of the most popular features and applications on the site.
What is Facebook Platform?
Facebook Platform is a development system that enables companies and developers to build applications for the
Facebook website, where all of Facebook's 24 million active users can interact with them. Facebook Platform
offers deep integration into the Facebook website, distribution through the social graph and an opportunity to build
a business.

What is the social graph?
The social graph is at the core of Facebook. It is the network of connections and relationships between people on
Facebook and enables the efficient spreading and filtering of information. Just as people share information with
their friends and the people around them in the real world, these connections are reflected online in the Facebook
social graph.

What is a Facebook application?
A Facebook application uses Facebook Plafform to access information from the social graph, offering users an
experience that's relevant to them. Facebook applications can plug into the Facebook website in a number of
ways: applications can be embedded on users'rofile pages, reside on their own separate pages (called "canvas"
pages), or live through desktop applications using data from the Facebook social graph.

What's new in Facebook Platform?

We'e

been adding functionality since Facebook Platform first shipped in beta in August 2006. With the latest
evolution of Facebook Platform however, third-party developers can now create applications on the Facebook site
with the same level of integration as applications built by internal Facebook developers. Now developers
everywhere have the ability to create Facebook applications that deeply integrate into the Facebook site, as well
as the potential for mass distribution through the social graph and new business opportunities.

Why did Facebook launch Facebook Platform?
Our engineers have created great applications for Facebook, but we recognized that third-party developers can
help us make Facebook an even more powerful social utility. Facebook Platform gives developers everywhere the
tools to create applications that we just wouldn't have the resources to build in-house, and those applications
make Facebook an even better way for our users to exchange information. Developers also benefit from
Facebook Platform as it gives them the potential to broadly distribute their applications and even build new
business opportunities.

What kinds of applications can be built on Facebook Platform?
The kinds of applications developers can build on Facebook Platform are limited only by their imaginations.
Because applications are based on the Facebook social graph they can be more relevant to users, keeping
people in touch with what and whom they care about. We'e already seen a variety of applications built by our
developer partners, including those for sharing media files, book reviews, slideshows and more. Some of the
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Are there any restrictions on what developers can build?
Developers are encouraged to exercise their creativity when building applications. Of course, all applications are
subject to the Terms of Service that every developer agrees to, which include basic requirements such as not
storing any sensitive user information, not creating any offensive or illegal applications, and not building anything
that phishes or spams users. And users will always have the power to report any applications that compromise
Facebook's trusted environment, keeping our users'nformation safe.
What are the benefits of Facebook Platform for users?
With Facebook Platform, users gain the ability to define their experience on Facebook by choosing applications
that are useful and relevant to them. Now that they have access to a virtually limitless set of applications from
outside developers, users have an unprecedented amount of choice. They can share information and
communicate with their trusted connections in ways that would never have been possible before Facebook
opened its platform.

How do users add applications to and remove applications from their account?
lf a user sees an application she likes on a friend's profile, she can add it to her account by clicking the "Add" link
on the application's profile box. She can also add new applications by navigating to the application's specific
page in the Facebook Platform Application Directory and clicking "Add Application" in the top-right corner. To
remove an application, she first clicks "Applications" on the left navigation bar. From there, she can "Remove" any
of the applications in her account, whether they are built by a developer partner or by Facebook.

What are the privacy controls for Facebook Platform, and what kind of user information can be shared?
On Facebook, users are always in control of their information and can choose how much of their information is
made available to specific applications. With Facebook Platform, we'e offering additional privacy controls and
requiring that third parties treat user information with the same respect we do and our users have come to
expect. Users can also choose to completely opt out of making their data available through Facebook Platform.
Applications can never violate users'asic privacy settings and are meant to provide users with a better
opportunity to share their information with their friends and networks.

—

What do third-party applications do with user information?
Applications built by third parties are required to respect Facebook users'rivacy preferences. Third-party
applications allow users and their friends to share information in new ways, without affecting the security and
privacy that they'e always enjoyed on Facebook.
How many applications are there for Facebook Platform?
At f8, we are launching with over 85 applications from more than 65 developer partners, and that's only the
beginning. We'e encouraging interested developers everywhere to create Facebook applications. We have no
limits on the number of applications that can be created.

What differentiates Facebook applications from widgets on other sites?
Facebook applications are deeply integrated into the site and take advantage of the network of real connections
through which users share information and communicate what we call the "social graph." Widgets are typically
single-purpose Flash add-ons to-a web page (i.e, displaying a single video) that are not fully integrated into a site
nor are aware of the social context among users.

—

How will Facebook maintain its minimalist style if users can add and move applications around on their

profile?

in their profiles, but we'e not
changing the essential layout and familiar style of the Facebook site. Facebook applications are focused on
providing new ways to spread information on Facebook, not about redesigning the way a profile looks. For
example, users will not be able to change the site background, add music that plays when their profiles load, or

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possibilities of Facebook applications are illustrated in the Facebook Platform Application Directory, available at
http: //www.facebook.corn/apps.

We'e giving our users the choice to add applications and control their placement

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insert animation into their profiles. Individual applications may play media, music or animations but only when a
visitor to that profile interacts with them.

How will Facebook deal with applications that compete with one another or even compete with Facebookbuilt applications?
We welcome developers with competing applications, including developers whose applications might compete
with Facebook-built applications. Many applications are likely to offer similar features. We'e designed Facebook
Plafform so that applications from third-party developers are on a level playing field with applications built by
Facebook. Ultimately, our users will decide which applications they find most useful, and it is these applications
that will become the most popular.

How will Facebook monetize Facebook Platform?
All the great applications built by our developer partners provide a service to our users and strengthen the social
graph. The result is even more engaged Facebook users creating more advertising opportunities.

Can Facebook applications include ads?
We want to enable developers to build a business on their Facebook applications, so we'e giving developers the
freedom to monetize their applications as they like. Developers can include advertising on their
pages, though no advertising will be allowed within the application boxes that appear within user profiles.
applications'anvas

Are you going to share revenue with developers?
While revenue sharing is not available at launch, we are looking into ways to share advertising revenue with
developers. This version of Facebook Platform already lets developers monetize their applications as they like,
whether they choose to offer it for free or build a business on their application.
What are the key technical elements of Facebook Platform?
Facebook Platform offers several technologies that help developers use data from the social graph. In addition to
the Facebook API, this recently launched version of Facebook Platform introduces Facebook Markup Language
(FBML), which enables developers to build applications that deeply integrate into the Facebook site. Facebook
Platform also includes Facebook Query Language (FQL), which lets developers use a SQL-style interface to
query the data they can access through the API.
For more details on the technology behind Facebook Plafform, check out the Facebook Developer site at
http: //developers.facebook.corn.

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ot'at ty without Attorney:
ALANH. PACKER, SBN 124724
NEWMEYER &, DILLIONLLP
1333 N. CALIFORNIABLVD.

Fot Cortrt Use Only

Attot ney

Flt Em)

SUITE 600

SAN Lti 'tTEO COUNTY

WALNUTCREEK, CA 94596
Telephone No:

925-988-3200

FAXNot 925-988-3290

FEB 2 6 2016

Ref. No. or File No

Attorney for:

Plaintiff
Qr QQQft

of Court, and Judicia!Disttict and Branch Court:
Superior Court Of The State Of California - Countv Of San Mateo
Plaintiff: BUTLER REALTY, LLC
Defendant: CALIFORNIACAPITAL INSURANCE COMPANY
Insert name

PROOF OF SERVICE
SUMMONS
I. At the time ofsetvice I was at least
2.

Hean'ng Date:

Dept/Dint

Time:

lt

Case Nutnbet:

CIV536982
18 years

of age and»ot a party

to this action.

I served copies of the SUMMONS; CIVILCASE COVER SHEET; COMPLAINT; ADR INFORMATIONPACKET; NOTICE OF
CASE MANAGEMENTCONFERENCE
CALIFORNIACAPITALINSURANCE COMPANYDAVIS TINDALL,AGENT FOR SERVICE OF PROCESS
MICHAELJOHNSON, CONTROLLER. AUTI-IORIZEDTO ACCEPT SERVICE

Party served:

3. a.

b. Person

setved:

OF PROCESS.
4. Address whet e the
5.

party was served

I se>ved
a.

2300 GARDEN ROAD
MONTEREY, CA 93940

the party:
by personal service. I personally delivered the documents listed in item 2 io the party or person authorized to receive
process for the party (1) on: Thu., Jan. 21, 2016 (2) at: 9:22AM

6. The

on

"Notice to the Person Setved" (on the Summons) was completed as follows:

behalf of: CALIFORNIACAPITAL INSURANCE COMPANY

Under CCP 416.10 (corporation)
7.

Person FVlro Served Papers:
a.

,

~ 01'I,
I

8.

Recoverable Cost Pcr CCP 1033.5(a)(4)(B)

HECTOR GARCIA

I u:,I

Ideclare

~

~

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1

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The Fee

e.

1511 West Beverly Blvd.
Les Angeles, CA90026
Telephone
[phone]
Fax
[phone]

I am: (3) registered California process server
(i)

wast

Independent Contractor

(ii) Registration No.:

of the State of Ca

'ia

100

(iii) County:

www.firstlegalnetwork.corn

under penalty ofperjury under the laws

for Setvice

d.

Monterey

that the

'cgoing is true and correct.

Date: Fri, Jan. 22, 2016
Judicial Council Form POS-010
Rule 2.150.(a)em(b) Rev January 1, 2007

PROOF

SU

F SERVICE

MONS

C1

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PH fAGGO

SUIN-100

SUMMONS

FOR COURT USE ONLY
(SOLO PARA USO OE iA CORTE)

(CITACION JUQICIAL)
NOTICE TO DEFENDANT:
(AVISO AL DEINANDADO):

pe

ELIZABETHM.B. KARNAZES, EDWARD L. NOVAK, LAURAJ.
WONS, and DOES 2 to 20, inclusive

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YOU ARE BEING SUED BY PLAINTIFF:
(LO ES TA DENANDANDOEL DENANDANTE):
JOHN E. FERRY and KIRSTEN FERRY

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NOTICEI You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the information
below.
You have 30 CALENDAR DAYS after this summons and legal papers are served on you to file a written response at this court and have a copy
served on the plaintiff. A letter or phone call will not protect you. Your written response must be in proper legal form if you want the court to hear your
case. There may be a court form that you can use for your response. You can find these court forms and more information at the California Courts
Online Self-Help Center ( /yM/t/t/courtinfo.ca.govisellhelp), your county law library, or the courthouse nearest you. If you cannot pay the filing fee, ask
the court clerk for a fee waiver form. If you do not file your response on time, you may lose the case by default, and your wages, money, and property
may be taken without further warning from the court.
There are other legal requirements. You may want to call an attorney right away. If you do not know an attorney, you may want to call an attorney
referral service. If you cannot afford an attorney, you may be eligible for free legal services from a nonprofit legal services program. You can locate
these nonprofit groups at the California Legal Services Web site (wl/wtt/1aM/helpcalifomia.org), the California Courts Online Self-Help Center
(wh/r/h/r/courtinfo.ca.govlselfhelp), or by contacting your local court or county bar association. NOTE: The court has a statutory lien for waived fees and
costs on any settlement or arbitration award of $ 10,000 or more in a civil case. The court's lien must be paid before the court willdismiss the case.
iauleni Lo hen demandado Sino
.msponde dentm de 30 diesis con,e puede decidir en su contra sin escucharsu uersidn Lea ia in.ihrmacian a
continuacidn.
Tiene 30 DlAS DE CALENDARIO despurss de que ie entreguen esta citacidn y papeies iegaies para presentar Una iespuesta por escrito en esta
corte y hacer que se entfegue una copia ai demandante. Una carta o una iiamada telefdnica no io protegen. Su respuesta por escrito tiene que ester
en formato legal correcto si desea que procesen su caso en ia corte. Es posibie que haya Un fonnuiario que usted pueda Usar para su respuesta.
Puede encontrar estos formuiarios de ia corte y masinformacidn en ei Centro de Ayuda de ias Cortes de California (www.sucorte.ca.gov), en ia
biblioteca de leyes de su condado o en ia corte que ie quede
ceica. Si no puede pagar ia cuota de presentacidn, pida ai secretario de la corte
que le dfs un formuiario de exencidn de pago de cuotas. Si no presenta su respuesta a tiempo, puede perder ei caso porincumpiimiento y la corte le
poCha quitar su sueido, dinero y bienes sin
adveffenc/a.
Hay otros requisitos iegaies. Es recomendabie que liame a un abogadoinmediatamente. Si no conoce a un abogado, puede iiamar a Un servicio de
remisidn a abogados. Si no puede pager a un abogado, es posibie que cumpia con los requisitos para oblener servicios iegaies gratuitos de un
programa de servicios legaies sin fines de lucio. Puede encontfar estos grupos sin fines de lucio en ei sitio web de California Legal Services,
(www.lawhelpcalifornia.org), en ei Centro de Ayuda de ias Cortes de California, (www.sucorte.ca.gov) o ponitsndose en contacto con ia corte o ei
coiegio de abogados locales. AVISO: Por ley, la corte tiene derecho a reciamar las cuotas y los costos exentos porimponer Un gravamen sobre
cuaiquier recuperacidn de $ 10,000 cS
de valor recibida mediante Un acuerdo o Una concesidn de arbitraje en Un caso de de/echo civil. Tiene que
pagar ei gravamen de la corte antes de que la corte pueda desechar ei caso.

as

as

as

The name and address of the court is:
(El nombre y direcci6n de la corte es): San

Mateo Superior Court

CIV535965

400 County Center
Redwood City, CA 94063

The name, address, and telephone number of plaintifPS attorney, or plaintiffwithout an attorney, is:
(El nombre, la direcci6n y el nf'Jmero de teldfono del abogado del demandante, o del demandante que no tiene abogado, es):

John E. Ferry,ahtd JLhsatcatt/eny

/ P.O. Box 55621,

Hayward CA 94545

(Fecha)

/ l650) 422~

i Secretario)

Pv

(For proof of service of this summons, use Proof of Service of Summons (form POS-010).)
(Para prueba de entrega de esta citati6n use el formuiario Proof of Service of Summons, (POSNOTICE TO THE PERSON SERVED: You are served
1.
as an individual defendant.
2.
as the person sued under the fictitious name of (specify):
"a
ea

4!'==-'.=-'= ~g,

3.

~
~
~

under:

s

d

y

4.
Form Adopted for Mandatory Use
Judkchat Council of Califomha
SUM-100 IRev. July 1, 200th)

~

I

,

Deputy
(Adjunto)

on behalf of (specify):

~

CCP 416.10 (corporation)
CCP 416.20 (defunct corporation)
CCP 416 40 (association or partnership)

~
~

CCP 416.60 (minor)
CCP 416.70 (conservatee)
CCP 416.90 (authorized person)

by personal delivery on (date):
Parte

ANSH06.g

SUMMONS

1

of 1

Code of CNhl Procedure SS 41 2 20, 465
wrvhv.courtinfo.ca.gov

I

1