Facebook Facing New Antitrust Lawsuit

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SAN FRANCISCO — Mark Zuckerberg, CEO of Facebook, downloaded a popular new app, Phhhoto, on August 8, 2014, and took a selfie. Soon, other Facebook admins and product managers did the same. The social network later made attempts to integrate Phhhoto.

But Facebook’s top executives’ interest in Phhhoto was just a show-off, according to a lawsuit filed Thursday in the Eastern District of New York by the now-defunct start-up. Instead, Facebook wanted to crush competition, according to the lawsuit accusing the company of antitrust violations.

In the lawsuit, Phhhoto’s founders – Champ Bennett, Omar Elsayed and Russell Armand – allege that no deal was struck after Mr. Zuckerberg and other Facebook executives downloaded their apps and approached them about a partnership. Facebook instead launched a competing product that mirrored Phhhoto’s features. According to the lawsuit, Facebook also suppressed the content of the photo-sharing app, Phhhoto, on Instagram.

Phhhoto is represented by Gary L. Reback, a well-known attorney. In the 1990s, Mr. Reback convinced the Department of Justice to sue Microsoft for violating antitrust laws, a case Microsoft ultimately settled in 2001. Phhhoto’s lawsuit seeks unspecified monetary compensation from Facebook.

Mr Reback said in an interview that the case came to the fore because of Mr. Zuckerberg’s personal involvement. He described Mr. Zuckerberg as “the monopolist’s CEO” and said the Facebook founder “has engaged in anticompetitive behavior on a scale not seen since Bill Gates,” one of Microsoft’s co-founders.

Facebook did not immediately respond to a request for comment.

The lawsuit is the latest antitrust fight against the world’s biggest tech companies. Facebook, Google and Apple have faced lawsuits over the years accusing competitors of copying their technology or buying it to crush them.

The lawsuit also adds to the frustrations experienced with Facebook last week. Renamed Meta. The Federal Trade Commission filed a lawsuit company accused of violating antitrust laws Owning a monopoly on the social network by acquiring Instagram and messaging app WhatsApp. The social network was also under intense public scrutiny after a former employee, Frances Haugen, leaked thousands of internal documents detailing how the company’s platforms were used to spread. incorrect information, hate speech and conspiracies.

Despite this, Michael Carrier, a professor at Rutgers University’s law school, said the standards for antitrust litigation remain high.

“It’s hard to show monopolization,” he said. “The turmoil in the political landscape will not necessarily be reflected in how the courts decide.”

Phhhoto was founded in 2012 and the app was launched in 2014. People have used it to edit photos and create videos that link images together. She became the buzz and was promoted by celebrities like Beyoncé, Miley Cyrus, and Katy Perry.

After Mr. Zuckerberg downloaded the app in 2014, so did Instagram founder Kevin Systrom and senior executives at Facebook and Instagram, according to the lawsuit.

In February 2015, Bryan Hurren, Facebook’s head of strategic partnerships, reached out to Phhhoto’s founders to discuss a “platform integration opportunity” according to the lawsuit. According to the lawsuit, Mr. Hurren offered to integrate Phhhoto into Facebook’s News Feed, which was the most important real estate on the world’s largest social platform.

But the lawsuit says, “Facebook has pushed Phhhoto for months without making any meaningful progress on the so-called integration.” Mr Hurren told Phhhoto that Facebook was “closed to some legal conversations”.

On March 31, 2015, Instagram changed its settings so Phhhoto users could not find their Instagram friends. When Phhhoto reached out to Facebook regarding the matter, Mr. Hurren told them that he was “openly upset with Instagram’s growth in users through Phhhoto’s relationship with Instagram.”

The founders of Phhhoto decided to move forward with an Android version of their app that is only available on iPhones. But on October 22, 2015, just hours before Phhhoto began launching its Android app, Instagram introduced a product that was, according to the lawsuit, a “slave clone” of Phhhoto.

The lawsuit says Instagram introduced other changes in March 2016 that reduced the visibility of Phhhoto content. Phhhoto’s founders discovered the change when he posted two videos to Instagram, one through the Phhhoto linked account and the other through a new Instagram account he opened. While the second account did have some of its followers, the video received more views and likes than the same video posted to the Phhhoto linked account, according to the lawsuit.

According to the lawsuit, Phhhoto was shut down in June 2017 “for lack of investment or any other means of survival”.

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