Appeals Court Reopens Phhhoto’s Antitrust Case Against Meta
A U.S. appeals court has revived a high-profile antitrust lawsuit against Meta (formerly Facebook), granting defunct social media app Phhhoto another opportunity to argue its case. The ruling overturns a 2023 dismissal by U.S. District Judge Kiyo Matsumoto, who had sided with Meta based on statute of limitations grounds.
Key Developments in the Case
- Original Lawsuit: Phhhoto filed suit in late 2021, alleging Meta engaged in anticompetitive practices by copying its core features and suppressing its growth.
- Initial Dismissal: The district court dismissed the case in 2023, citing time limits under the Sherman Act’s four-year statute of limitations.
- Appeals Court Decision: The Second Circuit Court of Appeals ruled that the lower court improperly applied the statute of limitations, allowing the case to proceed.
Phhhoto’s Allegations Against Meta
Phhhoto claims Meta employed several tactics to undermine its business:
Algorithmic Suppression
- Instagram’s 2016 algorithmic feed allegedly demoted Phhhoto’s content, reducing user engagement.
- Internal tests showed identical posts from smaller accounts outperformed Phhhoto’s content—despite Phhhoto having 500x more followers.
API Access Removal
- Meta allegedly revoked Phhhoto’s access to the “Find Friends” API ahead of Instagram’s algorithmic feed launch.
- A planned integration of Phhhoto’s content into Facebook’s News Feed was abruptly canceled.
Feature Copying
- Meta launched Instagram Boomerang, a looping video tool that Phhhoto claims replicated its patented technology.
Legal Implications
The appeals court found the lower court erred in its “fraudulent concealment” analysis. Phhhoto argued it only discovered Meta’s alleged misconduct in 2018 through court documents revealing Project Amplify—a program that manipulated feed rankings to benefit Meta’s products.
Next Steps
- The case returns to the district court for trial.
- Meta maintains the lawsuit is “baseless” and vows to defend itself vigorously.
Why This Case Matters
This ruling sets a precedent for how courts handle antitrust claims involving:
- Algorithmic bias: Can platforms manipulate feeds to disadvantage compe*****s?
- Statute of limitations: When does the clock start for concealed anticompetitive acts?
Legal experts suggest the outcome could influence future tech antitrust cases, particularly those involving dominant platforms and smaller innovators.
Image Credits: Meta
Updated with Meta’s statement post-publication.
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