Facebook sued by defunct photo app Phhhoto on antitrust grounds

Defunct photo app Phhhoto is suing Meta, formerly Facebook, on antitrust grounds, claiming the social media platform feigned interest in working with it, but then copied its features and hid its name from search results, effectively driving it out of business.

Phhhoto’s technology allowed users to capture five frames “in a single point-and-shoot burst,” which could be looped into a short video (a phhhoto) to be shared either on its platform or Instagram. Sound familiar? That’s because, according to Phhhoto, Facebook copied Phhhoto’s main feature and released it on its Instagram platform as Boomerang in 2015, after blocking Phhhoto from Instagram’s API and from being pre-populated in Instagram posts.

“The actions of Facebook and Instagram destroyed Phhhoto as a viable business and ruined the company’s prospects for investment,” Phhhoto says in a complaint filed in US District Court on Thursday. “Phhhoto failed as a direct result of Facebook’s anticompetitive conduct. But for Facebook’s conduct, Phhhoto was positioned to grow into a social networking giant, similar in size, scope, and shareholder value to other social networking and media companies with which Facebook did not interfere.”

Phhhoto, which launched in 2014 and shut down in 2017, claims it had 3.7 million monthly active users at its peak, and celebrities including Beyoncé, Joe Jonas, Chrissy Teigen, and Bella Hadid were uncompensated users of the app, posting its content to their Instagram accounts. Phhhoto claims in its complaint that Facebook CEO Mark Zuckerberg, former Instagram CEO Kevin Systrom, and several other Facebook employees downloaded the app in August 2014 and examined its features.

Image: Phhhoto / court filing

Bryan Hurren, then strategic partnerships manager at Facebook, reached out to Phhhoto in February 2015, telling the company it was “really awesome,” and offering to incorporate its tech into Facebook Messenger, according to the lawsuit. Phhhoto declined, but Hurren then offered to incorporate Phhhoto content into the News Feeds of Facebook users. After investing heavily in the project, Phhhoto says Hurren cited internal legal conversations that prevented the two companies from moving forward.

In March 2015, Instagram’s settings changed, so that users of Phhhoto were unable to find their friends on Instagram, the lawsuit claims. Phhhoto claims Hurren told its team at the time that the company was “upset that Phhhoto was growing in users through its relationship with Instagram.”

Then, just as Phhhoto was about to launch the Android version of its app in October 2015, Instagram introduced Boomerang, which the lawsuit calls a “slavish clone” of Phhhoto. In March 2016, Phhhoto discovered that its content was being suppressed on Instagram.

The company says its suspicions were confirmed in 2018, when UK’s Parliament released a cache of previously sealed documents as part of an investigation into Facebook’s alleged anti-competitive and data-collection practices.

“This revelation provided the first link between Facebook’s earlier actions toward Phhhoto (here, cutting off API access) as part of an exclusionary scheme with the algorithmic suppression discovered in late 2017,” according to Phhhoto’s lawsuit.

Phhhoto is seeking a jury trial and unspecified monetary damages. Joe Osborne, a spokesperson for Meta (Facebook changed its name to Meta on October 28th), said in a statement emailed to The Verge, “This suit is without merit and we will defend ourselves vigorously.“