Case 1:21-cv-06159-KAM-RLM Document 29 Filed 06/06/22 Page 1 of 15 PageID #: 286
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`Case No. 1:21-cv-06159-KAM-RLM
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF NEW YORK
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`PHHHOTO INC.,
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`META PLATFORMS, INC. and DOES
`NOS. 1-7,
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`Plaintiff,
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`v.
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`Defendants.
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`META PLATFORMS, INC.’S REPLY IN SUPPORT OF ITS
`MOTION TO DISMISS PHHHOTO INC.’S AMENDED COMPLAINT
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`AARON M. PANNER (pro hac vice)
`SILVIJA A. STRIKIS (pro hac vice)
`JULIUS P. TARANTO (pro hac vice)
`ALEX P. TREIGER (pro hac vice)
`KELLOGG, HANSEN, TODD,
` FIGEL & FREDERICK, P.L.L.C.
`1615 M Street, N.W., Suite 400
`Washington, D.C. 20036
`(202) 326-7900
`apanner@kellogghansen.com
`sstrikis@kellogghansen.com
`jtaranto@kellogghansen.com
`atreiger@kellogghansen.com
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`Counsel for Meta Platforms, Inc.
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`June 6, 2022
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`Case 1:21-cv-06159-KAM-RLM Document 29 Filed 06/06/22 Page 2 of 15 PageID #: 287
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`TABLE OF CONTENTS
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`Page
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`TABLE OF AUTHORITIES .......................................................................................................... ii
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`ARGUMENT ...................................................................................................................................1
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`I.
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`II.
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`Phhhoto’s Claims Are Untimely ..........................................................................................1
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`Phhhoto’s Antitrust Claim Fails on the Merits ....................................................................5
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`III.
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`Phhhoto Fails To State Claims Under New York Law ........................................................9
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`CONCLUSION ..............................................................................................................................10
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`Case 1:21-cv-06159-KAM-RLM Document 29 Filed 06/06/22 Page 3 of 15 PageID #: 288
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`TABLE OF AUTHORITIES
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`Page
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`CASES
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`A.Q.C. ex rel. Castillo v. United States, 656 F.3d 135 (2d Cir. 2011) .............................................3
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`Adderall XR Antitrust Litig., In re, 754 F.3d 128 (2d Cir. 2014) ....................................................7
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`Air Cargo Shipping Servs. Antitrust Litig., In re, 2010 WL 10947344
`(E.D.N.Y. Sept. 22, 2010) ................................................................................................ 3-4
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`Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) ......................................7
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`Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................8
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`Big Vision Priv. Ltd. v. E.I. du Pont de Nemours & Co., 610 F. App’x 69
`(2d Cir. 2015) .....................................................................................................................10
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`CA, Inc. v. Simple.com, Inc., 621 F. Supp. 2d 45 (E.D.N.Y. 2009) ...............................................10
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`Carson Optical Inc. v. eBay Inc., 202 F. Supp. 3d 247 (E.D.N.Y. 2016) ......................................10
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`CDx Lab’ys, Inc. v. Zila, Inc., 162 A.D.3d 970, 79 N.Y.S.3d 285
`(2d Dep’t 2018) ....................................................................................................................4
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`Ciprofloxacin Hydrochloride Antitrust Litig., In re, 261 F. Supp. 2d 188
`(E.D.N.Y. 2003) ...............................................................................................................2, 3
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`City of Anaheim v. S. Cal. Edison Co., 955 F.2d 1373 (9th Cir. 1992) ...........................................6
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`Com. Data Servers, Inc. v. IBM Corp., 166 F. Supp. 2d 891 (S.D.N.Y. 2001) .............................10
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`Cont’l Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690 (1962) ......................................6
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`Corcoran v. N.Y. Power Auth., 202 F.3d 530 (2d Cir. 1999) ..........................................................5
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`Duckett v. Williams, 86 F. Supp. 3d 268 (S.D.N.Y. 2015) ..............................................................9
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`Eatoni Ergonomics, Inc. v. Research In Motion Corp., 826 F. Supp. 2d 705
`(S.D.N.Y. 2011), aff’d, 486 F. App’x 186 (2d Cir. 2012) ...................................................6
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`Ferring B.V. v. Allergan, Inc., 4 F. Supp. 3d 612 (S.D.N.Y. 2014) ..............................................10
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`Gabapentin Patent Litig., In re, 649 F. Supp. 2d 340 (D.N.J. 2009) ...............................................6
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`GO Computer, Inc. v. Microsoft Corp., 508 F.3d 170 (4th Cir. 2007) ............................................2
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`Jiajia Luo v. Sogou, Inc., 465 F. Supp. 3d 393 (S.D.N.Y. 2020) ....................................................9
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`ii
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`LePage’s Inc. v. 3M, 324 F.3d 141 (3d Cir. 2003) ..........................................................................6
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`Lorain Journal Co. v. United States, 342 U.S. 143 (1951)..............................................................7
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`Merced Irrigation Dist. v. Barclays Bank PLC, 165 F. Supp. 3d 122
`(S.D.N.Y. 2016) ...................................................................................................................3
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`Midwest Mem’l Grp., LLC v. Int’l Fund Servs. (Ireland) Ltd.,
`2011 WL 4916407 (S.D.N.Y. Oct. 17, 2011) ......................................................................5
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`Nat’l Credit Union Admin. Bd. v. U.S. Bank Nat’l Ass’n, 898 F.3d 243
`(2d Cir. 2018) .....................................................................................................................10
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`Nat’l Football League’s Sunday Ticket Antitrust Litig., In re, 933 F.3d 1136
`(9th Cir. 2019) ......................................................................................................................6
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`Natsource LLC v. GFI Grp., Inc., 332 F. Supp. 2d 626 (S.D.N.Y. 2004) .......................................8
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`New York v. Facebook, Inc., 549 F. Supp. 3d 6 (D.D.C. 2021),
`appeal docketed, No. 21-7078 (D.C. Cir. July 29, 2021) ............................................5, 6, 7
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`Nine West Shoes Antitrust Litig., In re, 80 F. Supp. 2d 181 (S.D.N.Y. 2000) .................................3
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`Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438 (2009) ..........................................1, 5
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`Rombach v. Chang, 355 F.3d 164 (2d Cir. 2004) ............................................................................9
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`Samanich v. Facebook, 2021 WL 2856634 (E.D.N.Y. July 8, 2021) ..............................................4
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`SD3 II LLC v. Black & Decker (U.S.) Inc., 888 F.3d 98 (4th Cir. 2018) .........................................2
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`United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) .....................................................7
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`US Airways, Inc. v. Sabre Holdings Corp., 938 F.3d 43 (2d Cir. 2019) .........................................4
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`Viamedia, Inc. v. Comcast Corp., 951 F.3d 429 (7th Cir. 2020) .....................................................7
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`STATUTES AND RULES
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`Sherman Antitrust Act, 15 U.S.C. §§ 1-38:
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`§ 1.........................................................................................................................................4
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`§ 2.........................................................................................................................1, 4, 5, 6, 7
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`Fed. R. Civ. P. 9(b) ..........................................................................................................................9
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`iii
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`Phhhoto’s antitrust claim is time-barred because all of the challenged conduct occurred
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`more than four years before Phhhoto sued. Phhhoto cannot claim fraudulent concealment
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`because it alleges it had notice of its claim by April 2016. Nor has Phhhoto pleaded a continuing
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`violation because it alleges no overt act after April 2016, and it could not have suffered an
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`antitrust injury after it ceased operations. Phhhoto’s state-law claims expired by April 2020.
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`Numerous courts have dismissed similarly stale claims based on many of the same allegations.
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`Phhhoto provides no reason why its case is different.
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`Phhhoto’s claims also fail on the merits. All the specific conduct Phhhoto alleges is
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`either categorically lawful (e.g., Meta’s alleged refusals to assist Phhhoto in promoting its app)
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`or not plausibly anticompetitive (e.g., Meta’s launch of a competing service). And a plaintiff
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`cannot bring a Section 2 claim by aggregating lawful conduct: “Two wrong claims do not make
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`one that is right.” Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438, 457 (2009).
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`Phhhoto has also failed to plausibly allege monopoly power in a properly defined market because
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`its assertion that Instagram was “critical infrastructure” to “personal social networking” rivals is
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`unsupported by any properly alleged facts. Phhhoto’s defenses of its state-law claims similarly
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`contradict precedent and its own factual allegations. Because Phhhoto has amended but failed to
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`cure the deficiencies identified in its previous pleading, this Court should dismiss with prejudice.
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`I.
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`Phhhoto’s Claims Are Untimely
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`ARGUMENT
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`A.
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`Phhhoto cannot dispute that its antitrust claim accrued well outside the Sherman
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`Act’s four-year limitations period. Its arguments that it has nevertheless pleaded a timely
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`Section 2 claim find no support in the law or the allegations of the complaint.
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`1.
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`Phhhoto’s attempt to plead fraudulent concealment fails, first, because it had
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`notice of its claim by April 2016 or soon after. See Meta MTD at 9-10. Phhhoto maintains (at
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`19) that it “was not aware of Meta’s content suppression and did not know of any injury” until
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`October 2017. But Phhhoto admits (at 18) that it “saw [a] drop in metrics” on Instagram (but not
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`elsewhere) in April 2016, which “should [have] excite[d] [Phhhoto’s] suspicion” and “is the
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`same as actual knowledge of [its] entire claim,” In re Ciprofloxacin Hydrochloride Antitrust
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`Litig., 261 F. Supp. 2d 188, 225 (E.D.N.Y. 2003) (citation omitted). Its attempt (at 19-20) to
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`distinguish GO Computer, Inc. v. Microsoft Corp., 508 F.3d 170 (4th Cir. 2007), fails because,
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`like those plaintiffs, Phhhoto admits it was suspicious at the time. Am. Compl. ¶ 108 (Phhhoto
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`saw its growth “plummet”); id. ¶ 110 (Phhhoto “noticed” a “strange trend”). Furthermore,
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`Phhhoto admits (at 22) that all it took to put it on notice in October 2017 was to compare users’
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`reactions to two posts from one person on a single day. Phhhoto cannot explain how the alleged
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`impact of Instagram’s algorithm on phhhotos could have been missed in 2016  and it was not
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`missed.1
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`Acknowledging that it must allege diligence, Phhhoto nonetheless argues (at 21-22) that
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`it could not pursue its claim before 2017 because it lacked “insight into how the Instagram
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`ranking algorithm worked.” But notice “does not require awareness of sufficient facts to allow a
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`plaintiff to litigate its case to a jury without discovery.” SD3 II LLC v. Black & Decker (U.S.)
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`Inc., 888 F.3d 98, 112 (4th Cir. 2018). In any event, there are no allegations that Phhhoto took
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`any steps to investigate the effect of Instagram’s new algorithm  even though (1) Phhhoto
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`admits (¶ 91) it noticed its view counts suddenly dropped when Instagram publicly switched to
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`1 The various news events that Phhhoto says (at 19-20) harmed Meta’s reputation are
`uniformly irrelevant to whether Instagram’s algorithm suppressed competitor content and
`occurred well after Phhhoto says it had notice but years before it filed suit.
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`2
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`an algorithmic feed and “ruled . . . out” other explanations for the decline (¶ 93); (2) all of the
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`other conduct that Phhhoto now claims was anticompetitive (like API withdrawals and the
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`launch of Boomerang) had by then occurred (¶¶ 65, 71, 77); and (3) Phhhoto claims (at 15) that
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`Instagram was “critical” infrastructure that Phhhoto’s business “could not succeed” without.
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`Phhhoto’s failure to investigate or bring its antitrust claim  which it argues (at 7-13) it could
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`bring with or without its allegations regarding the algorithmic feed  “depicts complacency, not
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`diligence.” A.Q.C. ex rel. Castillo v. United States, 656 F.3d 135, 144 (2d Cir. 2011).2
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`2.
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`Phhhoto has not pleaded a continuing violation of the antitrust laws because it
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`alleges no new overt act that injured Phhhoto within the limitations period. See Meta MTD at
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`13-14. Phhhoto is wrong (at 24) that it continued to suffer antitrust injuries after it closed in June
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`2017. That argument relies on allegations found nowhere in the complaint. And even crediting
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`the idea that Phhhoto nominally “remained in existence” after June 2017, once Phhhoto “shut
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`down operations,” Am. Compl. ¶ 104, it was no longer seeking to compete with Meta for users.
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`Consequently, any subsequent suppression of phhhotos could not have harmed competition, and
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`thus is not an antitrust injury that could restart the limitations period. See Meta MTD at 14.
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`Phhhoto argues (at 17, 23-24) that each suppressed phhhoto restarts the limitations clock,
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`but the challenged “act” was Instagram’s April 2016 implementation of the algorithmic feed.
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`Any supposed continuing effects of the algorithm were “abatable but unabatable inertial
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`consequences.” Ciprofloxacin Hydrochloride, 261 F. Supp. 2d at 229 (citation omitted).
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`Phhhoto’s reliance (at 23) on In re Air Cargo Shipping Services Antitrust Litigation, 2010 WL
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`2 Merced Irrigation District v. Barclays Bank PLC, 165 F. Supp. 3d 122, 136 (S.D.N.Y.
`2016), and In re Nine West Shoes Antitrust Litigation, 80 F. Supp. 2d 181, 192 (S.D.N.Y. 2000),
`are inapposite because both involved “inherently self-concealing” price-fixing conspiracies, and
`because the plaintiffs promptly (“within days,” 80 F. Supp. 2d at 193) investigated and filed suit
`after receiving notice of potential price manipulation.
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`3
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`10947344 (E.D.N.Y. Sept. 22, 2010), a Section 1 case involving new sales at supracompetitive
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`prices, is misplaced, because maintaining a previously enacted unilateral policy is not a “new and
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`independent act,” US Airways, Inc. v. Sabre Holdings Corp., 938 F.3d 43, 68 (2d Cir. 2019).
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`While Phhhoto argues (at 24) that Meta’s adoption of the algorithm was not “final” because
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`Meta “continued to modify” it, nothing in the complaint supports that assertion.3
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`B.
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`Phhhoto’s unfair competition claim is subject to a three-year statute of limitations
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`and expired in April 2019. See Meta MTD at 15-16. Phhhoto argues (at 28) that a six-year
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`period applies because the “crux” of its claim “is that Meta obtained Phhhoto’s data and
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`technical insights through fraudulent statements.” But that assertion finds no support in the
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`complaint and, regardless, makes clear that Phhhoto’s claim alleges misappropriation of property
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` “data and technical insights.” “[T]he statute of limitations under New York law for an unfair
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`competition claim based on misappropriation of another’s labors or expenditures is three years.”
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`Samanich v. Facebook, 2021 WL 2856634, at *6 (E.D.N.Y. July 8, 2021) (Matsumoto, J.). The
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`manner in which the alleged misappropriation occurred, through fraud or otherwise, is
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`immaterial. See id. (three-year limitations period governed claim that Internet companies stole
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`plaintiff’s ideas); CDx Lab’ys, Inc. v. Zila, Inc., 162 A.D.3d 970, 971, 79 N.Y.S.3d 285, 286 (2d
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`Dep’t 2018) (three-year limitations period governed claim that defendant used confidential list to
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`poach customers).
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`C.
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`Because Phhhoto’s fraud claim is incidental to its Section 2 claim, the Sherman
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`Act’s four-year statute of limitations controls, and the claim expired in April 2020. See Meta
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`MTD at 16-17. Phhhoto insists (at 27) that its fraud claim has “meaning and force independent
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`3 Phhhoto’s invocation (at 24 n.12) of government tolling is unavailing because its
`antitrust claim expired in April 2020, before the FTC filed its suit.
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`4
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`of” its antitrust claim. That argument ignores Corcoran v. New York Power Authority, 202 F.3d
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`530 (2d Cir. 1999), which establishes that a fraud claim is incidental unless “the fraud occurred
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`separately from . . . the alternate claim” and “the injuries caused by the fraud are distinct from
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`the injuries caused by the alternate claim.” Id. at 545. Phhhoto’s fraud claim rests on the same
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`alleged conduct and injuries as its Section 2 claim. See Meta MTD at 16. Midwest Memorial
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`Group, LLC v. International Fund Services (Ireland) Ltd., 2011 WL 4916407 (S.D.N.Y. Oct. 17,
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`2011), does not help Phhhoto. The court there found the plaintiff’s fraud claims were incidental
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`to its conversion claim because they “center[ed] on allegations of theft rather than deception,”
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`and the plaintiff did “not allege that it suffered damages distinct from the conversions.” Id. at *5.
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`The same analysis applies here.
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`II.
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`Phhhoto’s Antitrust Claim Fails on the Merits
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`A.
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`Phhhoto asserts (at 5-6) that it has alleged a “course of conduct” not subject to
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`refusal-to-deal law. Courts have squarely rejected this argument with regard to the same
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`conduct, including in New York v. Facebook, Inc., where the district court addressed nearly
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`identical allegations regarding Phhhoto. See 549 F. Supp. 3d 6, 28, 47-48 (D.D.C. 2021)
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`(rejecting states’ “course of conduct” argument and holding that, “to be actionable, an unlawful
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`refusal-to-deal scheme would have to be made up of refusals that were themselves independent
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`violations of the Aspen Skiing test”). If a plaintiff’s choice to label its claim as a “course of
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`conduct” could circumvent refusal-to-deal doctrine, “monopolists might face liability for refusals
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`to deal that are categorically protected from scrutiny” for sound reasons of antitrust policy. Id. at
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`28. Phhhoto’s approach also contradicts the Supreme Court’s separate analysis of the claims in
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`linkLine, which rejected Section 2 plaintiffs’ similar attempts to “alchemize . . . a new form of
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`antitrust liability” by “join[ing] [one] claim that cannot succeed with” another. 555 U.S. at 457.
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`5
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`Phhhoto’s authorities (at 6) are inapposite. Continental Ore Co. v. Union Carbide &
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`Carbon Corp., 370 U.S. 690, 697-98 (1962), involved the aggregation of multiple firms’ market
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`shares to determine the market-wide impact of a conspiracy. In re National Football League’s
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`Sunday Ticket Antitrust Litigation, 933 F.3d 1136, 1152-53 (9th Cir. 2019), involved the
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`competitive impact of “interlocking agreements.” Neither case “stand[s] for the unworkable
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`proposition that business conduct that does not offend the antitrust laws may violate the Sherman
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`Act once it is combined with other lawful business conduct.” Eatoni Ergonomics, Inc. v.
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`Research In Motion Corp., 826 F. Supp. 2d 705, 710 (S.D.N.Y. 2011) (discussing Continental
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`Ore), aff’d, 486 F. App’x 186 (2d Cir. 2012).4
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`Phhhoto likewise fails to support its claim that any of the alleged conduct violates
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`Section 2. Phhhoto is incorrect in asserting (at 14) that the district court in New York dismissed
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`the states’ case solely on laches grounds; it also rejected the Platform-related claims on the
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`merits. See 549 F. Supp. 3d at 28, 34. Regarding the alleged API withdrawals, Phhhoto does not
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`attempt to substantively distinguish New York but instead argues (at 8-9, 14) only that this Court
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`should decline to follow it. Phhhoto’s arguments (at 9-10, 12-13) that Meta was obliged to let
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`Phhhoto advertise for free  with a favorable position in users’ feeds and pre-populated hashtags
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`on Instagram  underscore that Phhhoto does not claim that Meta interfered with Phhhoto’s
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`independent competitive efforts, but instead complains about Meta’s design of its own apps. The
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`4 Nor does LePage’s Inc. v. 3M, 324 F.3d 141 (3d Cir. 2003) (en banc), or City of
`Anaheim v. Southern California Edison Co., 955 F.2d 1373 (9th Cir. 1992), hold that
`categorically lawful conduct can become the basis of liability if combined with any other
`conduct. City of Anaheim even clarified that liability cannot follow from “perfectly legal acts.”
`955 F.2d at 1376; see also LePage’s, 324 F.3d at 162 (aggregating the “anticompetitive effect”
`of “exclusionary practices” already determined unlawful); In re Gabapentin Patent Litig., 649
`F. Supp. 2d 340, 361-68 (D.N.J. 2009) (permitting “overall scheme” liability only “in the patent
`context,” where the components of the alleged scheme were not categorically lawful).
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`6
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`allegations do not resemble the termination of a profitable joint venture explicable only as an
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`attempt to destroy a competitor and obtain a monopoly  the basis for liability in Aspen Skiing
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`Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985), and for the refusal-to-deal claim in
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`Viamedia, Inc. v. Comcast Corp., 951 F.3d 429 (7th Cir. 2020).5
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`Phhhoto’s reliance (at 12-13) on Lorain Journal and Microsoft is unavailing because both
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`were exclusive-dealing cases in which the defendant conditioned its business with third parties
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`on their promise not to deal independently with the defendant’s rivals. See Lorain Journal Co. v.
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`United States, 342 U.S. 143, 149 (1951); United States v. Microsoft Corp., 253 F.3d 34, 70-71
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`(D.C. Cir. 2001). In both cases, the defendant forced customers (not would-be rivals) to make a
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`choice they would never need to make if not subject to monopoly power: continue dealing with
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`the monopolist, or deal with rivals but sacrifice that necessary, monopolized product. By
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`contrast, Phhhoto alleges that Facebook declined to help Phhhoto, while leaving customers free
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`to engage in independent dealings with Phhhoto. See New York, 549 F. Supp. 3d at 31-34
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`(holding that the states’ allegations, including allegations regarding Phhhoto, did not state a
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`claim under Lorain Journal or Microsoft).
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`Phhhoto’s argument (at 11) challenging Boomerang turns solely on intent, which, by
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`itself, is never sufficient to support a Section 2 claim  especially where the alleged conduct
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`increases competition. See Microsoft, 253 F.3d at 59; New York, 549 F. Supp. 3d at 26, 33; In re
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`Adderall XR Antitrust Litig., 754 F.3d 128, 135 (2d Cir. 2014) (explaining that “[e]ven an act of
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`pure malice by one business competitor against another does not, without more, state a claim
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`under the federal antitrust laws”) (citation omitted). Phhhoto’s argument (at 11-12) based on
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`5 Phhhoto’s argument (at 10) that only a monopolist would limit how customers use its
`service is obviously incorrect. It is common for services to impose limitations on uses that risk
`undermining the commercial value of the service.
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`7
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`“misrepresentations to consumers” fails both because Phhhoto has not adequately alleged
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`misrepresentations, see Meta MTD at 27-29, and because it has not pleaded how any
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`misrepresentations to consumers harmed competition. Finally, Phhhoto’s purported “predatory
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`hiring” argument (at 13) fails because an unsuccessful attempt to hire Phhhoto engineers cannot
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`have harmed Phhhoto or competition and because trying to hire talented employees is
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`competition itself. Natsource LLC v. GFI Grp., Inc., 332 F. Supp. 2d 626, 632 (S.D.N.Y. 2004)
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`(“the hiring of a competitor’s employees alone generally cannot result in an antitrust violation”).
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`B.
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`Phhhoto’s antitrust claim fails for the independent reason that it has not
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`adequately pleaded monopoly power in a relevant market. First, Phhhoto has not plausibly
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`alleged that Meta had control over an input that PSNS rivals needed to compete. See Meta MTD
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`at 23-25. Phhhoto does not dispute that it must plead that Meta controlled such an input and that
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`its complaint does not define any market for such an input. Rather, Phhhoto asserts (at 15) that
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`its conclusory allegations that Meta controlled some form of undescribed “critical” infrastructure
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`suffice. These bare conclusions  unsupported by any concrete factual allegations explaining the
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`nature of the input, Meta’s share of any market for that input, or why rivals lacked viable
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`alternatives when Phhhoto itself alleges (¶ 49) that alternative distribution paths were available 
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`fall far short of what Twombly requires. Second, Phhhoto’s defense (at 14-16) of its alleged
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`PSNS market never explains why Phhhoto should be considered a viable PSNS competitor 
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`something the FTC and states have never claimed  when Twitter, iMessage, YouTube, and
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`LinkedIn should not. Because Phhhoto must allege facts to show both that Phhhoto was a
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`potential competitor and that other obvious alternative services were not, its claim fails.
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`8
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`Case 1:21-cv-06159-KAM-RLM Document 29 Filed 06/06/22 Page 13 of 15 PageID #: 298
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`III.
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`Phhhoto Fails To State Claims Under New York Law
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`A.
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`Phhhoto’s fraud claim fails to allege a factually false statement. Phhhoto does not
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`dispute that its allegations about the integration into Facebook newsfeed and policy prohibiting
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`pre-populated hashtags cannot support a fraud claim, instead focusing only on allegations that
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`Meta misled Phhhoto about the operation of its algorithm. Compare Meta MTD at 27-29, with
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`Opp’n at 25. But Phhhoto alleges nothing showing that Meta’s statements  that “all the posts
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`will still be there, just in a different order,” Am. Compl. ¶ 86  were false. See Rombach v.
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`Chang, 355 F.3d 164, 172 (2d Cir. 2004). Phhhoto does not allege that Meta ever said how it
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`would treat competitor content. Nor is it true, as Phhhoto asserts (at 25), that Meta’s broad
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`description of its algorithmic feed gave rise to a duty to divulge every detail of its proprietary
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`algorithm. “[R]evealing one fact about a subject does not trigger a duty to reveal all facts on the
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`subject.” Jiajia Luo v. Sogou, Inc., 465 F. Supp. 3d 393, 407 (S.D.N.Y. 2020) (citation omitted).
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`Phhhoto’s failure to plead with particularity how it detrimentally relied on Meta’s
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`statements provides an independent basis for dismissal. Phhhoto must allege facts showing how
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`Meta’s statement about its algorithm induced it to “change[] [its] position to [its] detriment.”
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`Duckett v. Williams, 86 F. Supp. 3d 268, 275 (S.D.N.Y. 2015). Phhhoto makes no such
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`allegations; it alleges only that, had it known about Instagram’s supposed algorithmic
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`suppression, “Phhhoto could have turned to the media, the courts, investors, or its community
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`with an explanation and a plea for assistance” rather than “looking for issues with [its] code.”
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`Am. Compl. ¶ 95 (emphasis added). This vague, equivocal allegation of what Phhhoto might
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`have done flunks Rule 9(b), fails to show a change in position, and makes clear that Phhhoto
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`suffered no harm from Meta’s statements (as distinct from Meta’s conduct).
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`9
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`Case 1:21-cv-06159-KAM-RLM Document 29 Filed 06/06/22 Page 14 of 15 PageID #: 299
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`B.
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`The Court should dismiss Phhhoto’s unfair competition claim for failure to
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`plausibly allege that Meta misappropriated any of Phhhoto’s exclusive property. Phhhoto
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`contends (at 26) that it “need not” allege misappropriation, but that contention is foreclosed by
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`precedent. “Not every act, even if taken in bad faith, constitutes unfair competition.” CA, Inc. v.
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`Simple.com, Inc., 621 F. Supp. 2d 45, 53 (E.D.N.Y. 2009) (dismissing claim “due to the absence
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`of any allegation that [defendant] misappropriated [plaintiff’s] labors, skills, expenditures, good
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`will or other property right of commercial value”); see also Carson Optical Inc. v. eBay Inc., 202
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`F. Supp. 3d 247, 267 (E.D.N.Y. 2016) (Matsumoto, J.). Unfair competition “claim[s] will fail
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`where a plaintiff cannot demonstrate the bad faith misappropriation of a commercial advantage
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`which belonged exclusively to him.” Big Vision Priv. Ltd. v. E.I. du Pont de Nemours & Co.,
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`610 F. App’x 69, 70 (2d Cir. 2015) (citation omitted).
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`Phhhoto alleges no facts to establish that the “information” or “insight” to which it
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`vaguely refers (at 26) belonged exclusively to Phhhoto. See Ferring B.V. v. Allergan, Inc.,
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`4 F. Supp. 3d 612, 630 (S.D.N.Y. 2014) (dismissing where plaintiff “fail[ed] to identify what
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`innovations or developments . . . were allegedly misappropriated”); Com. Data Servers, Inc. v.
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`IBM Corp., 166 F. Supp. 2d 891, 895 (S.D.N.Y. 2001) (similar). Phhhoto asserts (at 26) that this
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`material was “proprietary,” but the complaint makes no mention of Phhhoto’s property rights.
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`For the same reason, Phhhoto’s allegation (¶ 217) that Meta misappropriated the names of some
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`of its engineers cannot support its claim because Phhhoto does not (and could not) allege that it
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`had exclusive rights to its employees’ names.
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`The Court should dismiss Phhhoto’s amended complaint with prejudice. See Nat’l Credit
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`CONCLUSION
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`Union Admin. Bd. v. U.S. Bank Nat’l Ass’n, 898 F.3d 243, 257-58 (2d Cir. 2018).
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`10
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`Case 1:21-cv-06159-KAM-RLM Document 29 Filed 06/06/22 Page 15 of 15 PageID #: 300
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`Dated: June 6, 2022
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`Respectfully submitted,
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`/s/ Aaron M. Panner
`AARON M. PANNER (pro hac vice)
`SILVIJA A. STRIKIS (pro hac vice)
`JULIUS P. TARANTO (pro hac vice)
`ALEX P. TREIGER (pro hac vice)
`KELLOGG, HANSEN, TODD,
` FIGEL & FREDERICK, P.L.L.C.
`1615 M Street, N.W., Suite 400
`Washington, D.C. 20036
`(202) 326-7900
`apanner@kellogghansen.com
`sstrikis@kellogghansen.com
`jtaranto@kellogghansen.com
`atreiger@kellogghansen.com
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` Counsel for Meta
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`Platforms, Inc.
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`11
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