Defunct Startup Phhhoto Slaps Facebook With Lawsuit Alleging Anti-Competitive Practices

Defunct photo app startup Phhhoto filed an antitrust lawsuit in the Eastern District of New York against Facebook alleging the social media giant used anti-competitive tactics intended to pick off rivals, according to The New York Times on Friday (Nov. 5). Phhhoto is seeking unspecified monetary damages.

According to the lawsuit, Phhhoto’s founders allege that Facebook feigned interest in the app but instead launched their own product with similar features — Instagram. Phhhoto founders Champ Bennett, Omar Elsayed, and Russell Armand also claim that Facebook buried its content on Instagram.

Attorney Gary L. Reback is representing Phhhoto and told the Times that he hasn’t seen anti-competitive behavior like Facebook and CEO Mark Zuckerberg have exhibited since he convinced the Department of Justice to go after Microsoft in the 1990s.

See also: Facebook Pushes for FTC Lawsuit Dismissal

Joe Osborne, a spokesperson for Facebook’s parent company Meta, told the Times that the lawsuit has no merit and “we will defend ourselves vigorously.”

Founded in 2012 and rolling out its app in 2014, Phhhoto found early popularity from celebrities and was also favored by people using the app to edit photos and string them together in looping videos.

The suit alleges that Facebook strung the company along, dangling a deal that never surfaced. Instead, Phhhoto claims that Facebook ensured its content couldn’t be found and that Phhhoto users couldn’t connect with their friends on Instagram.

While the app was originally only available for iOS, Phhhoto’s founders decided to move forward with an Android version. They allege that on Oct. 22, 2015, just before Phhhoto was planning to drop its new app, Instagram introduced a “slavish clone” of Phhhoto, according to the suit.

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This is the latest antitrust lawsuit Facebook has faced in the U.S. and abroad. At the end of last year, the Federal Trade Commission and attorneys general from 46 states filed antitrust suits against the social giant. Google and Apple have also been hit with lawsuits accusing them of anti-competitive practices.