A U.S. federal judge dismissed a lawsuit against Meta Platforms on Friday that accused the company of maintaining an illegal monopoly over Instagram's shopping features. The legal action, brought by the London-based startup Ollywan, alleged that Meta integrated Instagram Shopping by copying its concept.
The dispute stems from Ollywan's 2016 launch of Winstag, a photo-sharing application that featured product tagging and affiliate shopping tools. Ollywan claimed its chief executive shared a business plan with Meta executives under assurances of confidentiality, and that Meta then launched Instagram Shopping in 2016 using the same concepts. Meta denied the allegations, stating in court filings that Ollywan was attempting to use antitrust laws to blame Meta for the failure of its own application.
U.S. Magistrate Judge Virginia DeMarchi in San Jose ruled that Ollywan's antitrust claims were filed too late and did not plausibly demonstrate harm to competition. The judge also rejected claims regarding Meta's efforts to prevent Ollywan from using the "Winstag" name, stating that antitrust laws do not bar Meta from enforcing trademark rights. While the case was dismissed, DeMarchi granted Ollywan permission to file an amended lawsuit with certain limitations.
The ruling affects the defunct startup Ollywan, which had sought to hold Meta accountable for what it described as the theft of its business model. The judge noted that Ollywan failed to explain how filing the action two years after ceasing operations could be considered prompt, noting the four-year window for antitrust claims under federal law.
The scale of the financial impact is not fully disclosed, as the source does not list a specific dollar amount for damages sought by Ollywan. However, the ruling occurs in the context of other litigation for Meta, which recently agreed to pay $18 billion to settle lawsuits regarding social media addiction.
Ollywan has been granted the opportunity to file an amended complaint to address the deficiencies identified by Judge DeMarchi. Meta continues to face other antitrust challenges, including a lawsuit from the shuttered app Phhhoto. Meta also previously defeated a lawsuit by the Federal Trade Commission regarding its acquisitions of Instagram and WhatsApp.