Ten years after the launch of Instagram Shopping, a British startup resumed the dispute over the origin of the idea behind this feature, accusing Meta of copying its business plan for a shopping platform with products tagged in photos before implementing the functionality on Instagram in 2016.
However, the US justice system dismissed the lawsuit filed by the startup. The decision was issued on Friday, the 28th, by federal judge Virginia DeMarchi, based in San Jose, California. The magistrate considered that the antitrust allegations presented by Ollywan were filed late and failed to convincingly prove that Meta's actions caused harm to competition.
Despite the initial rejection, DeMarchi granted Ollywan permission to submit a new version of the petition, subject to certain restrictions imposed by the court.
Details of the Dispute
The litigation is linked to Winstag, an application developed by Ollywan in 2016. This platform allowed for image sharing, identification of merchandise in these photos, and making purchases through affiliate links, a concept similar to what would later be adopted by Instagram.
The startup alleged that its president had shared a business plan with Meta executives before the launch of Instagram Shopping, under confidentiality agreements. The company maintains that Meta became aware of the concept and subsequently launched an analogous feature on Instagram.
Instagram Shopping works by allowing users to locate items tagged in posts and make purchases directly from those tags.
Meta's Position
Meta refuted any irregularity and contested the allegation of misuse of Ollywan's business plan. In a statement submitted to the court, the company argued that the startup was improperly trying to apply antitrust laws to blame it for the failure of its own application and the success achieved by Meta.
The action also addressed the Winstag trademark. Ollywan questioned Meta's efforts to prevent the startup from using this trademark. In this regard, DeMarchi ruled that antitrust laws do not prevent Meta from exercising its rights regarding registered trademarks.
Therefore, in addition to ruling that the monopoly accusations were filed out of time and without proving harm to competition, the judge rejected the attempt to use antitrust legislation to challenge Meta's conduct regarding the Winstag name.
However, the possibility of a new action keeps the conflict active. Ollywan can submit a reformulated complaint, provided it complies with the guidelines established by the magistrate.
This case of Ollywan is not isolated; Meta is also facing a lawsuit filed by a company associated with the photo-sharing app Phhhoto, which ceased operations and accuses Meta of contributing to its exit from the market. Furthermore, last year, Meta won a lawsuit filed by the U.S. Federal Trade Commission (FTC), which demanded that the company restructure or sell Instagram and WhatsApp, an accusation the company also denied.