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Meta Must Face Antitrust Lawsuit From Phhhoto, US Judge Rules

By  |  March 31, 2026

A U.S. federal judge has ruled that Meta Platforms must face an antitrust lawsuit brought by the now-defunct photo-sharing app Phhhoto, which alleges the social media giant used its market power to drive the startup out of business.

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    According to Reuters, U.S. District Judge Kiyo Matsumoto in Brooklyn said on Monday that Phhhoto plausibly claimed Meta suppressed the visibility of its animated photo content on Facebook and Instagram. The ruling allows key portions of the lawsuit to move forward, including allegations that Meta maintained an illegal monopoly in the personal social networking market in violation of federal antitrust laws.

    Per Reuters, the judge also allowed Phhhoto to pursue claims that Meta used confidential information obtained during partnership discussions to build a competing product. The lawsuit further alleges that Meta manipulated its newsfeed algorithm to limit the reach of Phhhoto’s content across its platforms.

    However, Matsumoto dismissed several other claims included in the lawsuit, which was originally filed in 2021. Meta has denied any wrongdoing and previously sought to have the case dismissed in full.

    In a statement, Meta said “this suit is baseless and we will continue to defend ourselves vigorously.”

    Phhhoto’s legal team did not immediately respond to requests for comment, according to Reuters.

    Read more: Trial Against Tech Giants Puts Social Media Design Under Scrutiny

    Phhhoto launched in July 2014 as an iPhone app centered on animated looping photos. Court records show the app grew rapidly, reaching approximately 10 million users, including 1.3 million daily active users, by 2016. The company ultimately shut down in June 2017.

    According to Reuters, Phhhoto alleges that Meta’s actions harmed its growth and viability, claiming the company lost users, investor backing, and eventually its entire business as a result. The startup also contends that Meta introduced its own competing app, Boomerang, in 2015 on the same day Phhhoto planned to announce its expansion to Android devices.

    “Meta used its control of critical infrastructure to degrade the quality of ‌Phhhoto’s ⁠content and the performance of its app, as well as to mislead and harm consumers,” Phhhoto’s attorneys told the court.

    The case has already undergone significant legal back-and-forth. Matsumoto initially dismissed the lawsuit, but an appeals court in 2024 ordered her to reconsider the claims, leading to the latest ruling.

    Per Reuters, the lawsuit adds to a growing list of antitrust challenges facing Meta. In a separate case in Washington, the U.S. Federal Trade Commission is attempting to revive claims that the company used its acquisitions of Instagram and WhatsApp to unlawfully strengthen its dominance in social networking.

    The case is Phhhoto Inc v Meta Platforms, U.S. District Court for the Eastern District of New York, No. 1:21-cv-06159.

    Source: Reuters