US Court Revives Phhhoto’s Antitrust Lawsuit Against Meta

A US Supreme Court on Tuesday reinstated an antitrust lawsuit against Facebook’s parent company Meta Platforms Inc. for allegedly pushing an animated photography application illegally out of business.

In a 2-1 order, the second US Circuit Court of Appeals in New York reversed US District Judge Kiyo Matsumoto’s decision last year dismissing Phhhoto’s lawsuit against Meta for filing the charges outside the four-year window for antitrust matters.

However, the appeals court ruled that the time limits should not have applied due to “equitable tolling based on fraudulent concealment,” arguing that Phhhoto only became aware of key issues, including alleged algorithmic manipulation by Meta in December 2018.

According to Chief Circuit Judge Debra Ann Livingston, who was joined by Circuit Judge Richard Wesley, Phhhoto provided enough evidence for now to show Meta allegedly concealed the change to its Instagram algorithm, delaying Phhhoto’s discovery of it until a date that fell within the statute of limitations to sue.

However, Circuit Judge Denny Chin said that Phhhoto had the requisite information to sue Metal well before it filed its case.

In its lawsuit filed in 2021, Phhhoto accused Meta of manipulating its technology in a way that prevented the visibility of the application’s animated photographs on Instagram.

Phhhoto alleged that Meta targeted and aimed to “crush” the photo-sharing application, ultimately depriving it of “access to hundreds of millions of dollars of capital.”

In a statement, Meta said Phhhoto’s allegations were baseless.

“We will continue to vigorously defend ourselves,” it said, adding that adjusting the way it presented content on Instagram feeds was based on user interest and other factors.

A lawyer for Phhhoto did not immediately respond to a request for comment.

The second Circuit decision does not address the merits of the allegations against Meta.

Phhhoto shut down three years after its launch in 2014. It said it had reached 10 million registered users in two years of business.

Meanwhile, Meta is facing other antitrust lawsuits filed by government and consumer plaintiffs.

The company is set to undergo trial in April in a US Federal Trade Commission case claiming that it bought Instagram and WhatsApp to crush emerging competition. Meta vehemently denied the allegations.