1 2 34. business is located within this County. Plaintiff submits to the jurisdiction of the Court. 3 4 This Court has personal jurisdiction over Defendant because its principal place of 35. Venue is proper in this Court under Cal. Code Civ. P. § 395(a) because Defendant resides in this County. 5 6 FACTUAL BACKGROUND I. The Defective Design of Facebook’s Algorithms and Services 7 A. Facebook Designed Its Social Network to Maximize Engagement 8 36. Facebook’s goal is to maximize “engagement,” a metric reflecting the amount of 9 time a user spends and the amount of interaction (“likes,” “shares,” comments, etc.) that the user 10 has with any given content. For Facebook, engagement determines advertising revenue, which 11 determines profits. “The prime directive of engagement … is driven by monetization. It befits a 12 corporation aiming to accelerate growth, stimulate ad revenue, and generate profits for its 13 shareholders.”13 14 37. 15 if our users decrease their level of engagement with Facebook, our revenue, financial results, and business may be significantly harmed. The size of our user base and our users’ level of engagement are critical to our success…. [O]ur business performance will become increasingly dependent on our ability to increase levels of user engagement and monetization…. Any decrease in user retention, growth, or engagement could render Facebook less attractive to developers and marketers, which may have a material and adverse impact on our revenue, business, financial condition, and results of operations. … Our advertising revenue could be adversely affected by a number of … factors, including: decreases in user engagement, including time spent on Facebook[.]14 16 17 18 19 20 21 22 23 24 25 26 27 28 In its SEC Form 10-K for the year ended December 31, 2012, Facebook warned: 38. Accordingly, Facebook intentionally incorporated engagement-based ranking of content into its system and the algorithms that drive it. Facebook’s News Feed—the first thing 13 Luke Munn, Angry by design: toxic communication and technical architectures, HUMANIT SOC SCI COMMUN 7 (July 30, 2020), https://www.nature.com/articles/s41599-02000550-7. 14 U.S. Securities and Exchange Commission Form 10-K, Facebook, Inc. (fiscal year ended Dec. 31, 2012) (“Facebook 2012 10-K”) at 13, 14, https://www.sec.gov/Archives/edgar/data/1326801/000132680113000003/fb12312012x10k.htm#s5D6A63A4BB6B6A7AD01CD7A5A25638E4. CLASS ACTION COMPLAINT 12 Case No. __________________