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Facebook, Gibson Dunn sanction order is light on dollars, heavy on message

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Facebook, Gibson Dunn sanction order is light on dollars, heavy on message

To Facebook parent Meta Platforms Inc (META.O) and its lawyers at Gibson, Dunn & Crutcher, $925,000 isn’t a whole lot of money.

You might even say that a million bucks, give or take, is nothing more than “loose change” to a company whose annual earnings topped $115 billion last year and to a law firm that reportedly grosses more than $2 billion annually.

“Loose change,” in fact, is how US District Judge Vince Chhabria of San Francisco described the $925,000 sanction he levied against Meta and Gibson Dunn on Thursday in a class action accusing the social media company of harvesting and sharing users’ personal data without their knowledge or consent. Chhabria, as you’ve probably heard, ordered Facebook and its lawyers to pay that sum to plaintiffs’ lawyers as recompense for their bad-faith litigation tactics.

Even in the context of just this case, which Facebook agreed late last year to settle for $725 million, a $925,000 sanction – which is less than half of the $2 million requested by plaintiffs’ lawyers — hardly rates an asterisk.

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But money wasn’t the point of Chhabria’s order.

The judge wanted to make an example of Facebook and its law firm to draw attention to what he considers to be a frequent problem in big cases: corporations and their lawyers using delay and obfuscation to wear down plaintiffs’ lawyers on the other side.

Chhabria’s message comes through most clearly near the end of the opinion, after the judge expended pages and pages detailing the many ways in which Facebook contested discovery requests from lead plaintiffs’ lawyers at Keller Rohrback and Bleichmar Fonti & Auld.

“Does anyone really think that Facebook was planning on taking this case to trial?” the judge wrote. “Or was Facebook, with the assistance of its lawyers, executing a different play from the playbook: resist discovery as long as possible, make things increasingly difficult and expensive and frustrating for the opposition, and hope that would drive down the case’s settlement value? This is, by far, the most likely explanation for Facebook and Gibson Dunn’s conduct.”

Some context is in order. Discovery in the case was so complex and contentious that the US magistrate judge who oversaw it urged both sides to engage a special master. And as I’ve previously told you during the year-long sanctions saga, after Chhabria first threatened Facebook and Gibson Dunn last February, the law firm has offered rationales and justifications for all of the discovery disputes in case. Gibson Dunn has insisted throughout that although the firm and its client litigated “zealously” as plaintiffs fished for a viable theory, they never violated a discovery order or failed to abide by instructions from the magistrate and special master. (It’s also worth pointing out that discovery had not yet closed when the two sides announced their settlement last year.)

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Chhabria noted those arguments by Facebook and its lawyers, even acknowledging a ruling from the magistrate judge that rejected plaintiffs’ accusations of bad faith litigation to prolong one of many discovery fights. But the judge also stepped back from the minutiae of the battles over particular categories of evidence to look more broadly at Facebook’s litigation strategy.

What he saw, he said, was all too familiar: A big corporation and its high-priced lawyers pushed the outer limits of the discovery process with the goal of forcing plaintiffs’ lawyers to accept a discounted settlement offer just to end the misery of fighting endless discovery disputes.

“This is not to suggest that there necessarily was some back-room meeting at which Facebook and its lawyers said, ‘Ok, here’s the plan, let’s be as unreasonable and obstructionist as possible in the hope that we’ll frustrate the plaintiffs into settling for less than they could get if we were cooperative in discovery,’” Chhabria wrote. “Unfortunately, this approach to litigation is common enough that no such meeting was necessary. Facebook and its lawyers fell into their roles with ease, and then they took things way too far.”

Gibson Dunn and Meta both declined to provide a statement on Chhabria’s order.

Chhabria took pains to emphasize that the problem in this case was not thoughtless or incompetent advocacy. Quite to the contrary. In his view, Facebook and Gibson Dunn’s self-described zealousness was instead “a sustained, concerted, bad-faith effort to throw obstacle after obstacle in front of the plaintiffs—all in an attempt to push the plaintiffs into settling the case for less than they would have gotten otherwise.”

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Chhabria delivered his reprimand on corporate litigation tactics with writing that’s irresistibly quotable, accusing Facebook and Gibson Dunn in the very first sentence of the order of “using delay, misdirection, and frivolous arguments to make litigation unfairly difficult and expensive for their opponents.”

Later in the opinion, in addressing Gibson Dunn’s assertion that class counsel were to blame for discovery delays, the judge offered a seething refutation: “No matter the conduct of the opposing party, counsel cannot twist their words—not to mention the words of the court—in support of frivolous arguments. They cannot resist the disclosure of obviously discoverable information. They cannot ignore potential sources of evidence, only for opposing counsel to learn about those sources at a … deposition near the close of discovery. They cannot treat depositions like fighting matches. And they cannot encourage their client’s obstinance.”

A relatively small monetary sanction is no salve for the sting of language like that – as Chhabria surely knows. If you are a corporate defendant or defense lawyer appearing in his courtroom, consider yourself warned. 

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Apple CEO says looking into possibility of building manufacturing facility in Indonesia

Apple CEO says looking into possibility of building manufacturing facility in Indonesia

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Apple CEO says looking into possibility of building manufacturing facility in Indonesia

Apple Inc will look into the possibility of building a manufacturing facility in Indonesia, its CEO said on Wednesday after meeting President Joko Widodo.

Apple CEO Tim Cook arrived in Jakarta on Tuesday, after visiting Vietnam. He met with Jokowi, as the president popularly known, and will be inaugurating an academy for Apple developers on the island of Bali.

“We talked about the president’s desire to see manufacturing in the country, and it is something that we will look at,” Cook told reporters after the meeting. 

Apple has based much of its key manufacturing of iPads, AirPods and Apple Watches in Vietnam and suppliers for MacBooks are also investing in the country.

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Apple has no manufacturing facilities in Indonesia but has established four Apple Developer Academies.

Indonesia has a huge tech-savvy population, making the Southeast Asian nation a key target market for tech-related investment.

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TikTok quizzed by EU on TikTok Lite launch in France, Spain

TikTok quizzed by EU on TikTok Lite launch in France, Spain

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TikTok quizzed by EU on TikTok Lite launch in France, Spain

ByteDance’s TikTok has been given 24 hours to provide a risk assessment on its new app TikTok Lite launched this month in France and Spain on concerns of its potential impact on children and users’ mental health, the European Commission said on Wednesday.

The move by EU industry chief Thierry Breton under EU tech rules known as the Digital Services Act (DSA) comes two months after he opened an investigation into TikTok over possible DSA breaches. 

The landmark DSA requires companies to do more to tackle illegal and harmful content on their platforms, with fines of up to 6% of their global annual turnover for violations.

The Commission on Wednesday said it had sent a request for information to TikTok, asking for more details on the risk assessment the social media company should have done before deploying TikTok Lite in the 27-country European Union.

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“This concerns the potential impact of the new ‘Task and Reward Lite’ programme on the protection of minors, as well as on the mental health of users, in particular in relation to the potential stimulation of addictive behaviour,” the EU executive said in a document seen by Reuters.

“TikTok must provide the risk assessment for TikTok Lite in 24 hours and the other requested information by 26 April 2024, after which the Commission will analyse TikTok’s reply, and then assess next steps.”

The Commission also asked for details on measures the company has put in place to mitigate systemic risks.

TikTok Lite, an app with a new functionality aimed at users aged 18+, was launched in France and Spain this month.

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SiTime introduces chip aimed at saving power in AI data centers

SiTime introduces chip aimed at saving power in AI data centers

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SiTime introduces chip aimed at saving power in AI data centers

SiTime (SITM.O) on Wednesday introduced a chip that it says is designed to help data centers built for artificial intelligence applications run more efficiently.

SiTime makes what are known as timing chips, whose job is set a steady beat for all the parts of a computer and keep them running together in sync, like a conductor in an orchestra directing multiple groups of instruments. The company says its new line of chips, called Chorus, can do so with 10 times more precision than older styles of timing chips.

SiTime CEO Rajesh Vashist said the company aims to help customers save electricity with that precision. SiTime’s chips themselves require less than a watt of power, but powerful AI chips such as Nvidia’s (NVDA.O) require more than 1,000 watts of power.

With a more precise clock to keep all the elements of a computer in sync, parts of the machine can be turned off for a few milliseconds at a time when they are not in use. Over the multiple years a power-hungry data center server might be in use, it can generate energy savings, though the amount will depend on how SiTime’s chips are used.

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“We deliver timing that they can rely on so that they can wake up their products and bring data more efficiently to them, rather than just running more often,” Vashist said in an interview.

SiTime said the chips will be available in the second half of this year.

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