On January 26, 2024, the Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“DOJ”) (together, “the agencies”) announced in a joint statement that they have updated the language they use in preservation letters, second requests, voluntary access letters, and compulsory legal process to address the increased use of ephemeral messaging platforms and collaboration tools. The announcement reflects the agencies’ concern that certain categories of documents are not being preserved or produced during investigations.
In the FTC’s statement, Henry Liu, Director of the Bureau of Competition, explained that the “update reinforces that [a company’s] preservation responsibility applies to new methods of collaboration and information sharing tools, even including tools that allow for messages to disappear via ephemeral messaging capabilities.” Manish Kumar, Deputy Assistant Attorney General of the DOJ’s Antitrust Division,[i] added that the update “will ensure that neither opposing counsel nor their clients can feign ignorance when their clients or companies choose to conduct business through ephemeral messages.” Mr. Kumar went on to say that failure to preserve and produce all responsive nonprivileged documents, “including data from ephemeral messaging applications designed to hide evidence . . . may result in obstruction of justice charges.”
The agencies seek to characterize the statement as a simple clarification of their views on companies’ responsibility to preserve and produce responsive non-privileged documents from these newer sources of documents. However, the fact that the FTC and the Antitrust Division felt it necessary to change the language in their requests and to issue the statement underscores that there is uncertainty regarding the application of preservation obligations to new technologies. The update provides some clarity about the agencies’ position at a time when new workplace technologies are supplementing or replacing older forms of communication, such as email, and as the ways these new technologies are used in the workplace continue to shift rapidly.
The update from the FTC and the Antitrust Division states that collaborative work environments (e.g., SharePoint), messaging apps that can have ephemeral functionality (e.g., WhatsApp, Signal, Telegram), and personal devices used for work purposes must be preserved in response to litigation hold notices. One concrete example of the agencies’ position is the definition of “Collaborative Work Environment” that the FTC added to its Model Second Request, which covers tools like SharePoint, Google Drive, iManage, and other similar databases. The FTC also supplemented the definition of “documents” in the Model with a separate definition of “Messaging Application”, which goes beyond more traditional means of communication, like email, to capture “platforms, whether for ephemeral or non-ephemeral messaging, for . . . chats, instant messages, text messages, and other methods of group and individual communication (e.g., Microsoft Teams, Slack).” In addition, the agencies’ updated language places a greater emphasis on preserving their ability to obtain information from personal devices that employees use for work purposes. While the FTC and the Antitrust Division identify the types of information they expect to obtain, it is important to remember that courts are the ultimate arbiters of what information companies must preserve and produce in an investigation or litigation, as well as of questions regarding potential spoliation.
The agencies’ announcement reflects the growing scrutiny of the manner in which companies collect and store communication data, including in civil litigation, and demonstrates their view that key information may be present in messaging applications in addition to emails. For example, in March 2023, a federal judge sanctioned Google for failing to preserve chats from Google Chat—Google’s internal messaging platform. See In re Google Play Store Antitrust Litigation, 664 F. Supp. 3d 981 (N.D. Cal. 2023). As the court explained, Google Chat messages were automatically deleted after 24 hours. This practice continued even after a litigation hold was in place. Instead of preserving chats automatically, as it did for email, Google “gave each employee carte blanche to make his or her own call about what might be relevant . . . and whether a Chat communication should be preserved.” The court concluded that, by failing to preserve Google Chat messages, Google “intended to subvert the discovery process[.]” In a separate challenge to Google’s search advertising practices, DOJ’s Antitrust Division moved for sanctions because of the company’s chat preservation methods. See Mem. in Support for Mot. for Sanctions, United States et al. v. Google LLC, 1:20-cv-03010-APM (D.D.C. Feb. 23, 2023) (Docket No. 512-1). However, the court in the DOJ litigation denied that motion because the judge concluded that he could not make a finding as to whether Google’s failure to preserve chats was intentional.
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The updated language announced by the FTC and the Antitrust Division signals that the agencies are concerned that certain categories of documents are not being preserved and produced during investigations. The update may be an effort on the part of the agencies to put companies on notice about the agencies’ views of their obligations, particularly with respect to some of these “newer” sources of documents, prior to bringing civil and—potentially—criminal actions.
The update provides an opportune moment for companies to review and update their relevant policies. In particular, companies should consider consulting with counsel to evaluate whether their document retention policies, personal device policies (including any bring-your-own-device policy), acceptable use policies, and litigation hold practices are appropriate. This process likely would also involve understanding how employees communicate, including whether they currently use ephemeral messaging or other apps on their personal devices for work purposes.
Covington is tracking these developments closely. If you have any questions, please contact a member of our Antitrust/Competition or E-Discovery, AI, and Information Governance practice groups, including the attorneys listed on this page. You can also learn about other recent developments relevant to merger enforcement at Covington’s content hub on the topic.
[i] With respect to DOJ, the statement came from only the Antitrust Division. It is unclear how—if at all—this statement will impact how other divisions at DOJ, including the Criminal Division, approach these issues. As a result, companies with cases pending before other DOJ components likely will want to conduct an independent evaluation of how those components approach preservation obligations relating to collaborative work environments and ephemeral messaging applications.
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