On August 8, 2014, Facebook CEO Mark Zuckerberg downloaded the popular new app Phhhoto and took a picture with it. Following suit were other Facebook executives and product managers. The social media platform then made noises about integrating Phhhoto.
According to a complaint filed Thursday in the Eastern District of New York by the now-defunct firm Phhhoto, Facebook’s top executives’ interest in Phhhoto was merely a show. According to the lawsuit, Facebook just sought to stifle competition.
Phhhoto’s founders, Champ Bennett, Omar Elsayed, and Russell Armand, claim in the lawsuit that after Zuckerberg and other Facebook executives downloaded their app and approached them about a cooperation, no agreement was reached. Instead, Facebook released a competitor product that mimicked Phhhoto’s characteristics. According to the lawsuit, Facebook also restricted Phhhoto’s content on Instagram, its photo-sharing app.
Gary Reback, a well-known lawyer, is representing Phhhoto. Reback convinced the Justice Department to file an antitrust lawsuit against Microsoft in the 1990s, which Microsoft eventually resolved in 2001. Facebook is being sued by Phhhoto for undisclosed monetary damages.
According to Reback, the lawsuit stands out because of Zuckerberg’s personal involvement. He dubbed Zuckerberg “the monopolist’s CEO” and claimed he had participated in “anti-competitive activity on a scale not seen since Bill Gates, one of Microsoft’s founders.”
“We will firmly defend ourselves against this complaint,” said Joe Osborne, a representative for Meta, Facebook’s parent company, late Thursday night.
The case is the world’s largest tech giants’ most recent antitrust challenge. Over the years, rivals have sued Facebook, Google, and Apple, accusing them of copying their technology or buying them to kill them.
The lawsuit adds to Facebook’s difficulties, which was rebranded Meta last week. The Federal Trade Commission has filed a lawsuit against the corporation, alleging that it has a monopoly on social networking as a result of its purchases of Instagram and WhatsApp. After a former employee, Frances Haugen, disclosed hundreds of internal documents exposing how the company’s platforms were used to propagate misinformation, hate speech, and conspiracies, the social network has come under severe public scrutiny.
Nonetheless, according to Michael Carrier, a law professor at Rutgers University, the criteria for antitrust litigation remain high.
“It’s difficult to demonstrate monopolisation,” he remarked. “How the courts rule will not always reflect the turbulence in the political landscape.”
The company Phhhoto was established in 2012, and the app was released in 2014. It was used to edit photos and create looping films by linking images together. It became popular after celebrities such as Beyoncé, Miley Cyrus, and Katy Perry endorsed it.
According to the lawsuit, after Zuckerberg downloaded the app in 2014, Kevin Systrom, the founder of Instagram, and senior executives at Facebook and Instagram did as well.
According to the lawsuit, Bryan Hurren, then-strategic Facebook’s partnerships manager, contacted Phhhoto’s founders in February 2015 to discuss a “platform integration potential.” According to the lawsuit, Hurren offered to integrate Phhhoto into Facebook’s News Feed, which was premium real estate on the world’s largest social media network.
However, the suit claims that “Facebook dragged Phhhoto around for months without making substantial progress on the ostensible integration.” According to the lawsuit, Hurren told Phhhoto that Facebook was “stuck on some legal conversations.”Instagram altered its settings on March 31, 2015, making it impossible for Phhhoto users to find their Instagram pals. According to the lawsuit, when Phhhoto contacted Facebook about the problem, Hurren told them that “Instagram was obviously concerned that Phhhoto was expanding in users through its relationship with Instagram.”The makers of Phhhoto decided to release an Android version of their software, which had previously only been available on iPhones. According to the lawsuit, Instagram unveiled a product that was a “slavish clone” of Phhhoto on Oct. 22, 2015, just hours before Phhhoto was slated to debut its Android version.According to the lawsuit, Instagram made further changes in March 2016 that lowered the visibility of Phhhoto’s postings. When one of Phhhoto’s creators posted two videos to Instagram, one through his Phhhoto-linked account and the other through a separate Instagram account he had created, he discovered the change. According to the lawsuit, despite the fact that the second account had a quarter of the followers, the video was viewed and liked more than the identical video posted to the Phhhoto-linked account.According to the lawsuit, Phhhoto shut down in June 2017 due to a lack of “funding or any other means to remain functional.”