Photo’s antitrust lawsuit against Meta is back in court

A US appeals court overturned an antitrust lawsuit against Meta Introduced at the end of 2021 by the long-defunct social app Phhhoto. In court, the startup argued that Meta violated US antitrust law by copying its key features and stifling competition. U.S. District Judge Kiyo Matsumoto in 2023 Granted Meta’s motion to dismiss the complaint according to the periods established by the relevant claim periods. However, on appeal, the court determined that the case should have been heard because these periods should not have been applied.

The decision means Phhhoto will get another chance to argue that Meta behaved in an anti-competitive manner, putting his company out of business after copying its features and limiting its growth.

The case It calls into question whether and how Meta used Instagram’s algorithm feed implementation to suppress Phhhoto’s content, causing Phhhoto’s user registration and engagement to decline while Meta’s own app gained traction.

Phhhoto claims to have discovered the algorithmic manipulation while using a different account to post videos on Instagram. When the same post was shared on Phhhoto’s own account, it never got attention, but despite Phhhoto’s account having 500 times more followers, the other account’s video received more likes and views, the lawsuit said.

The district court never ruled on those claims because the judge ruled on what is known as antitrust law The Sherman Act the four-year statute of limitations had expired.

Phhhoto also alleges that Meta used other anti-competitive tactics to harm its business.

For example, before Instagram launched its algorithmic feed in March 2016, Phhhoto claimed that Meta had revoked access to the “Find Friends” API, which allowed third-party apps like itself to access Meta’s social graph. In addition, Meta has suspended plans to integrate Phhhoto’s content into the Facebook News Feed, as the lawsuit alleges. Meta followed Phhhoto with its own competing product: looping video software Instagram BoomerangCopying Phhhoto technology, the startup said.

On Photo’s appeal, his case should have been tried because the relevant part of his antitrust claim was subject to “equitable payment on the basis of fraudulent concealment.” Or, in other words, because Phhhoto didn’t discover problems with Meta’s algorithmic feed until later, the court should have interrupted the statute of limitations. The company learned it ran software called Meta when documents related to a federal lawsuit in California were released in December 2018. Strengthening the project, One that manipulates and reorders posts and content in consumers’ feeds for the benefit of Meta.

Although the appeals court did not rule on the case itself (because it never reached a decision point), it concluded that the lower court erred “at every step of the fraudulent concealment analysis.” The court’s previous ruling against Photo’s antitrust claim is untimely and the case must be heard.

The case will be sent to the district court for reconsideration.

“As we have said from the beginning, this allegation is without merit and we will continue to vigorously defend ourselves,” a Meta spokesperson said in response to a request for comment.

Updated after posting with meta comment.