Meta faces antitrust lawsuit over Instagram Shopping 'monopoly'

By Mike Scarcella

Sept 29 (Reuters) - Meta Platforms META.O is facing a new lawsuit alleging it stole its Instagram Shopping business plan from a now-defunct technology startup.

The lawsuit, filed on Friday in the federal court in San Jose, California, by London-based Ollywan Limited, claims Meta used its dominance in social networking to crush Ollywan’s app, Winstag, which shut down in 2023.

Ollywan alleged Meta violated U.S. antitrust law by integrating Instagram with Instagram Shopping, which lets users buy products tagged in posts. The complaint said Meta’s conduct left rivals unable to compete and fostered a monopoly worth more than $2 billion annually.

"Meta deliberately stole Ollywan’s innovative business plan and tied its monopoly in the market for social networks to foreclose competitive alternative products in the market for Tag-based Shopping," the lawsuit said.

Meta had no immediate comment. Attorneys for Ollywan did not immediately respond to a request for comment.

Winstag launched in 2016 as a photo-sharing app with product tagging and affiliate shopping features. Users could follow friends and others to see what they are wearing and buy pieces through product tags.

According to the complaint, Ollywan’s chief executive met with Meta executives in 2015 and shared the business plan under assurances of confidentiality. A Meta executive allegedly said, “we can potentially work together.”

Meta instead launched Instagram Shopping six weeks after Winstag, incorporating features from the rival platform, the lawsuit said. The lawsuit called Meta’s alleged theft “blatant,” saying that many features matched details Ollywan had previously shared.

Meta then used "pretextual enforcement" of trademark objections to the "Winstag" name to deter users from using Ollywan's app, the lawsuit said.

Ollywan is seeking unspecified monetary damages and a court order against ongoing or future anticompetitive conduct.

Meta is also facing other antitrust challenges.

A U.S. appeals court last year reinstated a lawsuit accusing Meta of driving photo app Phhhoto out of business, after a judge said the claims were filed too late. The company is also fighting the Federal Trade Commission’s effort to unwind its acquisitions of Instagram and WhatsApp.

Meta has denied the allegations in those lawsuits.

The case is Ollywan Limited v Meta Platforms Inc, U.S. District Court, Northern District of California, No. 5:25-cv-08215.

For plaintiff: Sam Stake and Sami Rashid of Quinn Emanuel Urquhart & Sullivan

For defendant: No appearances yet

Read more:

Meta asks judge to rule that FTC failed to prove its monopoly case

US judge in Facebook data privacy case rejects class action bid

Meta must face shuttered photo app’s antitrust lawsuit, US appeals court rules