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Meta (Facebook) faces new antitrust lawsuit from Phhhoto for cloning their feature

The founders of a defunct photo-sharing startup, are now suing Meta, formerly known as Facebook, over allegations that the company violated antitrust laws by cloning their app with Instagram's Boomerang feature

Mark Zuckerberg, Facebook CEO Mark Zuckerberg, Facebook whistleblower, Facebook, Facebook Whistleblower testimony, Frances Haugen, Who is Frances HaugenFacebook Chairman and CEO Mark Zuckerberg testifies at a House Financial Services Committee hearing in Washington, in 2019. (Image source: REUTERS/Erin Scott/File Photo)

The founders of a defunct photo-sharing startup, are now suing Meta, formerly known as Facebook, over allegations that the company violated antitrust laws by cloning their app with Instagram’s Boomerang feature and ultimately crushing their business.

Phhhoto was launched in 2014 by Champ Bennett, Omar Elsayed, and Russell Armand, which enabled users to take and post a short bust of photos that looped, similar to a GIF. The newly filed lawsuit, alleges that Facebook wanted to squash the competition by cutting off the app’s access by dismissing a proposed relationship and then eventually cloning its own copy of Phhhoto’s core feature: the seconds-long looping video. This was eventually introduced as the Boomerang feature on Instagram, which Facebook had bought in 2012 for $1 billion.

According to TechCrunch, the Phhhoto founders said in the suit, that Facebook CEO Mark Zuckerberg was an early user of their app. The lawsuit said other Facebook executives downloaded the app as well.

“On or about August 8, 2014, Zuckerberg downloaded and installed the app onto his phone, entered the phone number of his device into the Phhhoto app, created a personal account, and posted a profile picture of himself (reproduced below) to his new Phhhoto account,” says the suit, according to the TechCrunch report.

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Facebook and Instagram then “embarked on a scheme to crush Phhhoto and drive it out of business,” in part by creating a “slavish clone” of the Phhhoto app, the suit noted, reported the New York Times. 

The suit alleged that Bryan Hurren, Facebook’s strategic-partnerships manager, wanted to join hands with Phhhoto in February 2015—  a partnership that would integrate Phhhoto into Facebook Messenger.  Hurren in an email also called the Phhhoto app “really awesome”, the suit adds.

However, Phhhoto declined the partnership, but then Facebook offered to integrate the app into its News Feed — which the defunct startup saw as a meaningful opportunity. Phhhoto’s founders said in the suit that Facebook “strung Phhhoto along for months without making meaningful progress on the supposed integration,” according to NYT.

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In March 2015, Instagram unexpectedly cut Phhhoto off from its “Find Friends” feature, the suit claims. It is worth noting that only hours before Phhhoto was set to announce its launch on Android, Instagram announced the launch of its own looping-photo feature, the suit added.

Meanwhile, a Meta spokesperson, Joe Osborne, told The New York Times that “the suit is without merit and we will defend ourselves vigorously.”

First published on: 08-11-2021 at 02:28:25 pm
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