Brooklyn, New York-headquartered PHHHOTO Inc. filed an amended complaint on Monday against Meta Platforms Inc. over an alleged series of anticompetitive actions taken to quash its young rival and ultimately monopolize the personal social networking services market.
According to the complaint and in 2014, the plaintiff launched its product, a “social networking application built around pathbreaking camera phone technology that permitted users to photograph a series of integrated photos in a single point-and-shoot burst, and then share those ‘phhhotos’ on the Phhhoto platform or other social networking applications.” The filing claims that at the height of its usership, the application engaged 3.7 million monthly and 1.3 million daily active users.
However, in 2015 while Phhhoto founders were in discussion with Facebook about integration, the company suddenly withdrew Phhhoto’s access to the Instagram Find Friends API, which had allowed Phhhoto to access the Instagram friends list. Upon investigation, Facebook’s Strategic Partnerships Manager told a Phhhoto founder that the company was “upset that Phhhoto was growing in users through its relationship with Instagram.”
The complaint details a series of other incidents restricting Phhhoto’s ability to grow and thrive. The upstart alleges that Meta blocked #Phhhoto from being pre-populated in Instagram posts, copied Phhhoto and released the copy as “Boomerang,” suppressed Phhhoto’s posts after an update to Instagram’s newsfeed algorithm, and attempted to poach Phhhoto employees.
“Meta’s actions destroyed Phhhoto as a viable business and ruined the company’s prospects for investment,” the complaint summarizes. In June 2017, Phhhoto reportedly shut its doors as a result of Meta’s anticompetitive conduct which the plaintiff describes as a refusal to deal and monopolization.
The Eastern District of New York lawsuit states three claims for relief under Section 2 of the Sherman Act, for fraud, and for unfair competition under New York law. Phhhoto is represented by Hausfeld LLP and Carr & Ferrell LLP.
