Fed. Trade Comm'n v. Match Grp.
| Docket Number | 1:22-mc-54 (RJL/GMH) |
| Decision Date | 01 May 2023 |
| Parties | FEDERAL TRADE COMMISSION, Petitioner, v. MATCH GROUP, INC., Respondent. |
| Court | U.S. District Court — District of Columbia |
In March 2020, the Federal Trade Commission (“FTC” or “Petitioner”) issued a civil investigative demand (the “March 2020 CID”) to Match Group Inc. (“Respondent” or “Match”). That CID was part of a non-public investigation spurred by a 2019 New York Times article suggesting a relationship between a start-up developing facial recognition technology and OkCupid, a dating site owned by Respondent, that involved the start-up accessing and using images from the dating site to help build its product.[1]The parties wrangled over the March 2020 CID for more than two years until, in May 2022, Petitioner filed this action to enforce the administrative subpoena seeking production of 136 documents that Match has withheld on the basis of attorneyclient privilege or work product protection. This litigation has proved as contentious as the administrative proceedings, with Match not only resisting production of those documents, but also decrying as bad faith conduct the FTC's litigation tactics, including its refusal to agree to seal this case. This decision does not discuss whether the withheld documents are protected from disclo-sure-that is a dispute for another day. Instead, it addresses Match's motion to keep the bulk of the record of these proceedings under seal until the Court rules on the FTC's petition (the “Primary Motion to Seal”) and Match's motion for leave to take discovery to unearth evidence that the FTC filed this enforcement action for an improper purpose (the “Motion for Discovery”).[2]For the reasons that follow, both motions are denied.
Id. By the end of July 2019, Respondent had completed an investigation-prompted by a July 11, 2019 pre-publication request from the New York Times for a comment on the remark from Clari-fai's founder, see ECF No. 15-10 at 2-and sent a letter to Clarifai demanding that Clarifai cease and desist accessing Respondent's services and systems and attempting to create profiles on those systems, as well as destroy any user-profile images it had copied and any derivative works created from those copies, ECF No. 17-7 at 3; see also ECF No. 17-2, ¶¶ 3-7.
As result of the New York Times article, the FTC initiated a “non-public investigation” into whether Match had engaged in unfair competition under Section 5 of the Federal Trade Commission Act (the “FTC Act”), 15 U.S.C. § 45, by “sharing . . . consumer information, including photos and other data of OkCupid users.” ECF No 17-4 at 2 & n.1. In February 2020, FTC staff informed Match of the investigation and directed it to retain all documents that might be relevant to the agency's inquiry. Id. at 2-3. In March 2020, the FTC issued the CID at issue here, seeking information, including documents, about representations made to customers regarding the collection, use, storage, and transfer of their data; security practices and procedures; any sharing of data with Clarifai; and “the investigation [and other activities] that [Respondent] conducted . . . in response to” the New York Times article, “which reported how [Clarifai] obtained access to OkCupid user photos that were used to build Clarifai's face database and facial recognition technology.” ECF No. 15-15 at 8-10, 12-13. That access allegedly occurred in September 2014. See ECF No. 2-1, at 3-4, ¶ 8; ECF No. 17-3 at 2, ¶ 3; ECF No. 17-5 at 8.
By the end of May 2020, Match had produced approximately 600 pages of documents and answered interrogatories in response to the March 2020 CID. ECF No. 17-3, ¶ 4; see also ECF No. 17-5 (Respondent's Third Response to March 2020 CID). Among those responses was an answer to an interrogatory in a prior unrelated CID issued to Ok Cupid in November 2014-that is, two months after the alleged sharing of data with Clarifai-in which the company asserted that neither it nor its affiliates had shared with any third party (that is, any party other than OkCupid users and OkCupid affiliates) users' personal information unless it was “aggregated with that of other users and/or anonymized.” ECF No. 15-13 at 13; see also ECF No. 2-1 at 3-4, ¶ 8. That investigation was closed in 2015 (the “2014-2015 FTC investigation”)-according to Match because evidence showed that OkCupid's users knew their profile information was publicly available and could be used by others. ECF No. 15-2, at 3-4, ¶ 4.
Respondent reportedly expected the current investigation to be closed for similar reasons as the 2014-2015 FTC investigation. ECF No. 17-1 at 19-20. However, on August 5, 2020, just over two months after Match's purportedly final response to the March 2020 CID, FTC staff informed Match of deficiencies, seeking, among other things, supplemental information about data-sharing with third parties, including Clarifai; additional documents about the investigation postdating the New York Times article; and a privilege log. See generally ECF No. 15-16. So began a saga that continues today.
Match produced its first privilege log-containing 62 entries-near the end of August 2020. ECF No. 2-1 at 5, ¶ 13; see also ECF Nos. 28-7, 28-8. In September 2020, FTC staff replied with a letter complaining that Match's “application of the work product doctrine [was] overbroad,” sweeping in documents that appeared to pre-date the involvement of any attorneys in the investigation, which, in any case, had a business purpose; that documents over which it claimed attorneyclient privilege included communications between non-attorneys; and that the descriptions of certain documents did not meet Match's burden to establish the basis for protection. See ECF No. 17-11.
It appears that Match made supplemental document productions in September and October 2020, which together totaled 23 documents. ECF No. 28-2 at 2-3, ¶ 2; ECF Nos. 28-3, 28-6; see also ECF No. 17-10 at 4. FTC staff continued to press for further searches. For example, in November 2020, agency staff expressed disapproval of the allegedly limited terms used and custodians identified by Match in its searches. See ECF No. 17-19 at 2-5; ECF No. 17-10. Simultaneously, the privilege dispute at the heart of this action was heating up. In that same November 2020 letter, FTC staff charged that Match had not produced a single document that addressed the substance of the company's response to the July 11, 2019 inquiry from the New York Times or the ensuing article, had not responded to the agency's challenges to the privilege designations, and had not provided an updated privilege log. ECF No. 17-19 at 6-8. Match supplied a supplemental privilege log on December 15, 2020, along with a letter asserting that it stood by all the attorneyclient and work product designations and suggesting that it would explain “specific privilege calls” at the FTC's request. ECF No. 15-18; see also ECF No. 2-1 at 9, ¶ 24.
Apparently dissatisfied with Match's document production and other responses, in February 2021, FTC staff issued notices seeking oral testimony from five of Respondent's current or former employees and officers, as well as from a corporate designee.[3]ECF No. 15-23. Those investigative hearings occurred between May 4, 2021, and June 2, 2021. See, e.g., ECF No. 2-1 at 68-82, 85-103, 106-26, 129-41, 148-49 (). During that period, Match produced six additional responsive documents, an additional privilege log entry, and a consolidated privilege log.[4]See ECF No. 2-1 at 8-10, ¶¶ 22, 24, 27; see also id. at 50-65. In September 2021, Match produced its final privilege log of 271 entries, while complaining that its efforts (including the testimony at the investigative hearings) had been “duplicative, cumulative, unreasonable, and unduly burdensome.” ECF No. 15-17 at 2, 5; see ECF No. 2-1 at 188-216.
FTC staff was still unsatisfied and, in a November 2, 2021 letter, demanded that Respondent produce four categories of documents identified on its privilege log: documents (1) withheld pursuant to a “blanket corporate policy” that press inquiries about privacy issues “give rise immediately to anticipation of litigation”; (2) relating to the company's response to the New York Times' inquiry and customer inquiries or complaints resulting from the publication of the article; (3) relating to the company's response to the New York Times' inquiry and later customer inquiries that...
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