Greg's Corner

Update on Facebook and Parliament, and Delaware suing to dissolve Backpage’s LLCs

First, we have a quick update on the ongoing British Parliament hearing from yesterday involving Facebook. The hearing went almost along the lines as the US Congressional hearing where Facebook CEO Mark Zuckerberg testified. A number of politicians addressed their concerns with Facebook’s privacy policies and interference by political agitators with Facebook giving little to no information in response. However, according to reports, Parliament may publish the sensitive internal documents that they’ve seized later this week. This could potentially be devastating for Facebook as the documents could show just how complicit Facebook was in allowing the Cambridge Analytica scandal to happen.

Moving on from Facebook, Backpage was back in the news again recently. As you may know, Backpage was responsible for 80% of all online human trafficking in the US by allowing thinly veiled ads for prostitution on their website. Earlier this year, Backpage was seized by the Federal Government and CEO Carl Ferrer pleaded guilty to human trafficking and money laundering charges. One of the last vestiges of Backpage’s existence was that even after their government seizure, Backpage was still incorporated in Delaware as an LLC in good standing and there was little the state government could do to change that. Now, that all seems to be changing.

After passing a state law back in June, Delaware is now able to dissolve certain LLCs with Backpage being one of them. Last week, Delaware State Attorney General Matt Denn asked the Court of Chancery to dissolve the four LLCs that were related to Backpage. AG Denn argues that Backpage abused their “powers, privileges or existence” under state law. This lawsuit was the first one filed after the passing of the new law in June. This has far-reaching implications that affect more than just Backpage as various other shady operations have hidden under Delaware’s lax corporate tax laws. Hopefully, this means that companies like Backpage are no longer welcome in the First State.