A US appeals court has revived an antitrust lawsuit against Meta, filed by the now-defunct social app Phhhoto, ruling that the case should be heard despite a lower court's decision to dismiss it due to statute of limitations. The appeals court found that the statute of limitations should not have applied, giving Phhhoto another chance to argue that Meta engaged in anti-competitive behavior, ultimately leading to Phhhoto's demise.

The lawsuit, filed in 2021, alleges that Meta violated US antitrust law by copying Phhhoto's core features and suppressing competition. Phhhoto claims that Meta's introduction of an algorithmic feed on Instagram led to a decline in Phhhoto's user registrations and engagement, while Meta's own app gained traction. The startup argues that Meta manipulated its algorithm to restrict Phhhoto's growth, citing an experiment where a video posted on Instagram received more likes and views from a different account, despite Phhhoto's account having 500 times more followers.

Phhhoto also accuses Meta of using other anti-competitive tactics to hurt its business. For instance, the startup alleges that Meta withdrew its access to the "Find Friends" API ahead of Instagram's launch of an algorithmic feed in March 2016. Additionally, Meta terminated plans to integrate Phhhoto's content into the Facebook News Feed, as planned. Furthermore, Phhhoto claims that Meta launched a competing product, Instagram Boomerang, which copied Phhhoto's technology.

The appeals court's decision centers around Phhhoto's argument that its case should have been heard because the relevant part of its antitrust claim should have been subject to "equitable tolling based on fraudulent concealment." This means that the court should have paused the statute of limitations because Phhhoto hadn't discovered the issues with Meta's algorithmic feed until later. Phhhoto found out about Meta's program, Project Amplify, which manipulated and reordered posts and content in consumers' feeds for Meta's benefit, in December 2018 through documents filed in a federal lawsuit in California.

The appeals court concluded that the lower court erred at "each step of the fraudulent concealment analysis," meaning the court's earlier decision against Phhhoto's antitrust claim was untimely and the case should be heard. The case will now be sent back to the district court to be tried, giving Phhhoto an opportunity to present its claims and potentially hold Meta accountable for its alleged anti-competitive behavior.

The implications of this ruling are significant, as it raises questions about Meta's business practices and its impact on competition in the social media landscape. The case could have far-reaching consequences for the tech industry, potentially setting a precedent for how companies can and cannot engage with competitors. As the case moves forward, it will be closely watched by industry observers and antitrust regulators alike.