A U.S. appeals court has overturned a previous dismissal of an antitrust lawsuit filed by the now-defunct social app Phhhoto against Meta. Phhhoto accused Meta of violating U.S. antitrust law by copying its features, suppressing competition, and ultimately driving the app out of business. The lawsuit, initially dismissed by U.S. District Judge Kiyo Matsumoto due to the Sherman Act’s four-year statute of limitations, gained new traction when the appellate court ruled the time limits were improperly applied. The court found that Phhhoto's claims, including allegations of algorithmic manipulation on Instagram, warranted further consideration.
Phhhoto alleged that Meta restricted its growth through anticompetitive tactics, including withdrawing access to Meta’s "Find Friends" API and canceling plans to integrate Phhhoto’s content into Facebook’s News Feed. The startup further accused Meta of launching Instagram’s Boomerang app, which mirrored Phhhoto’s looping video feature. The appeals court criticized the lower court’s handling of Phhhoto's claims of fraudulent concealment, asserting the startup discovered relevant evidence, such as Meta’s "Project Amplify," only in 2018. While the appeals court has not ruled on the case’s merits, the decision allows Phhhoto another opportunity to present its arguments. Meta continues to deny the allegations, calling the lawsuit baseless.
