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A US appeals court has overturned a decision in an antitrust lawsuit against Meta, which was filed in late 2021 by the long-shuttered social app Phhhoto. In court, the startup claimed that Meta violated US antitrust law by copying its core features and suppressing competition. U.S. District Judge Kyo Matsumoto in 2023 granted Mita’s motion to dismiss the complaint due to time limits imposed by relevant statutes of limitations. However, on appeal, the court found that the case should have been heard because these time limits should not have applied.
The decision means Phhhoto will get another chance to argue that Meta acted in an anti-competitive manner, ultimately putting its company out of business after copying its features and restricting its growth.
the issue It calls into question whether and how Meta used an algorithmic feed introduction on Instagram to suppress Phhhoto content, resulting in Phhhoto user registrations and engagement declining while Meta’s own app gained traction.
Phhhoto claims it discovered the algorithm manipulation when it used a different account to post a video on Instagram. The same post received no attention at all when shared on Phhhoto’s own account, but the other account’s video got more likes and views, even though Phhhoto’s account had 500 times more followers, the lawsuit states.
The district court never ruled on these claims because the judge determined the antitrust law known as antitrust law Sherman Act The four-year statute of limitations has expired.
Phhoto also argues that Meta used other anticompetitive tactics to hurt its business.
For example, before Instagram launched an algorithmic feed in March 2016, Phhhoto alleged that Meta withdrew its access to the “Find Friends” API, which allows third-party apps like itself to leverage Meta’s social graph. Additionally, Meta ended its plans to integrate Phhhoto content into Facebook News Feed, as planned, the lawsuit states. Meta came after Phhhoto with its own competitive product as well: the looping video app Instagram BoomerangThe startup said it copied Phhhoto’s technology.
Foto’s appeal suggested that her case should have been heard by the court because the relevant portion of her antitrust claim should have been subject to “an equitable charge based on fraudulent concealment.” Or in other words, the court should have paused the statute of limitations because Phhhoto did not discover the issues with the Meta algorithm feed until later. The company discovered in December 2018, when documents filed in a federal lawsuit in California were made public, that Meta ran a program called project amplification, Which manipulated and re-arranged posts and content in consumers’ feeds for Meta.
While the appellate court does not make a final decision on the case itself (because it never reaches the point of issuing a ruling), it concludes that the trial court erred at “every step of the fraudulent concealment analysis,” meaning that the trial court erred at “every step From the analysis of fraudulent concealment. The court’s previous ruling against Phhoto’s antitrust claim was untimely and the case should be heard.
The case will be returned 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 baseless and we will continue to defend ourselves vigorously.”
Updated after posting with meta comment.
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