A U.S. appeals court has overturned the ruling in an antitrust lawsuit filed by long-shuttered social app Phhoto against Meta in late 2021. The company argued in court that Meta violated U.S. antitrust laws by copying core functionality and stifling competition. In 2023, U.S. District Judge Kiyo Matsumoto granted Mr. Mehta's motion to dismiss the complaint, citing related statute of limitations limitations. However, on appeal, the court found that these deadlines should not have applied and the case should have been heard.
The decision could once again be challenged by Phhoto, who argued that Meta acted in an anti-competitive manner, copying its features and limiting its growth, ultimately putting the company out of business. means.
The lawsuit questions whether and how Meta took advantage of Instagram's introduction of algorithmic feeds to throttle content on Photo, and how Meta's own app gained traction while Photo led to a decrease in user registration and engagement.
Phmoto claims he discovered the algorithm manipulation when he posted a video on Instagram using a different account. When the same post was shared on Phhoto's own account, it didn't get much attention, but videos from other accounts received more likes, even though Phhoto's account had 500 times more followers. !” and were viewed many times, the complaint states.
The district court did not rule on those claims because the judge ruled that the four-year statute of limitations under the antitrust law known as the Sherman Act had expired.
Phmoto also alleges that Meta used other anti-competitive tactics to harm its business.
For example, before Instagram launched its algorithmic feed in March 2016, Photo Inc. claimed that Meta revoked access to its Find Friends API. This API allows third-party apps like Instagram itself to access Meta's social graph. Additionally, Meta has canceled its planned integration of Phhoto content into the Facebook News Feed, the lawsuit states. Meta followed Photo with its own competitive offering. The product is Instagram Boomerang, a looping video app that copies technology from Photo.
Image credit: Meta
Phohoto's appeal suggests that the company's case should have been heard in court because the relevant parts of the company's antitrust claims should have been subject to “equitable levy based on fraudulent concealment.” There is. Or, in other words, the court should have suspended the statute of limitations because Phhoto didn't discover the problems with Meta's algorithmic feed until later. The company said in December 2018, when documents filed in a federal lawsuit in California were made public, that Meta was using Project Amplify to manipulate and reorder posts and content in consumers' feeds for Meta's benefit. I found out that it was running a called program.
The appeals court did not issue a final ruling on the case itself (because it did not get to the point of the decision), but found that the lower court erred at “each step of the fraud concealment analysis.” I concluded. The court's previous ruling on Phohoto's antitrust claims was ill-timed and the case should be heard.
The case will be remanded to district court for trial.
In response to a request for comment, a Meta spokesperson said: “As we have said from the beginning, this lawsuit is without merit and we will continue to vigorously defend ourselves.”
Updated with meta comments after publication.