Meta is facing fresh claims that it co-opted a startup’s playbook to launch tag-based shopping and then used its dominance in social media to shut down competition. In a newly filed lawsuit, one of the latest in a series of legal challenges over Big Tech’s dominance in digital markets, Ollywan Limited alleges that Meta Platforms Inc. effectively crushed its now-defunct social commerce app, Winstag, a strategy the startup says cemented a $2 billion monopoly in the burgeoning market for “Tag-based Shopping.”
Setting the stage in the complaint that it filed in the Northern District of California on September 26, Ollywan claims that it launched Winstag in 2016 as a photo-sharing platform that allowed users to follow friends, see what they were wearing, and purchase pieces directly through product tags. Ollywan alleges that a year before Wintag went live, its founder Hilmi Konde met with Meta executives at Web Summit Dublin, where he shared the company’s confidential business plan under assurances of confidentiality. One exec allegedly “expressed enthusiasm and requested more detailed information about Konde’s pre-existing proprietary concept” and told Konde that they could “potentially work together.”
However, instead of collaborating, Ollywan alleges that just six weeks after Winstag’s launch, Meta rolled out Instagram Shopping, a feature that mirrored Winstag’s core functionality. After “stringing Ollywan along for a year,” Meta allegedly launched a copycat product, incorporating proprietary details Ollywan says it had shared, including product tags, affiliate links, and an integrated shopping cart.
In addition to engaging in what it characterizes as “blatant theft,” Ollywan claims that Meta subsequently made it impossible for Winstag to compete, depriving the company of billions in potential revenue, stifling its ability to scale, and eliminating its early-mover advantage.
>> In a nutshell: Ollywan alleges that Meta’s coordinated conduct – including copying Winstag’s business model, tying Instagram Shopping to its dominant social network, and “weaponiz[ing] its advertising platform to prevent competitors from reaching consumers” – foreclosed competition in the emerging market for tag-based shopping. These practices, Ollywan says, transformed a potentially competitive sector into a Meta-dominated monopoly, allowing the company to extract billions in “supracompetitive profits” while harming consumers, creators, merchants, and rival startups.
Ollywan sets out claims of monopolization and attempted monopolization under Section 2 of the Sherman Act, raises a claim under California’s Unfair Competition Law, and is seeking unspecified monetary damages, treble and punitive damages, as well as injunctive and declaratory relief.
The Social Network Market
Like most antitrust battles, the outcome of Ollywan’s case will turn in large part on how the court defines the relevant market – and whether Ollywan can establish that Meta wields monopoly power and whether its conduct meaningfully restrains competition. Here, Ollywan points to the market for social networks and the market for tag-based shopping on social network platforms. The first is already well recognized in U.S. thanks to prior cases like Klein v. Facebook and FTC v. Facebook, in which courts have accepted that “social networking” is distinct from other online services, such as professional networking or e-commerce. This gives Ollywan a foundation to argue that Meta’s share of 70–98 percent in social networking represents real monopoly power.
The second market definition – for the “Market for Tag-based Shopping on Social Network Platforms” – is more novel and strategically significant. By carving out this separate category, Ollywan aims to show that Instagram Shopping is not just another form of online retail or digital advertising, but a distinct commercial ecosystem that merges product discovery, social proof, and transaction processing within a single platform. According to the complaint, this market cannot be substituted with Amazon, affiliate links, or traditional ads because the consumer experience of “discovery commerce” is fundamentally different.
For Ollywan, the benefit of this framing is twofold. First, it isolates Meta’s conduct in the realm of tag-based shopping, positioning Winstag as a direct competitor unfairly pushed out of a market it was attempting to carve out. Second, it underscores how Meta allegedly leveraged its social network monopoly to dominate a separate but adjacent market, a textbook form of alleged unlawful tying and foreclosure. By doing so, Ollywan strengthens its argument that what happened to Winstag is not just bad business luck, but an antitrust injury flowing from Meta’s market power.
THE BOTTOM LINE: The lawsuit against Meta comes as regulators and rivals continue to test the limits of Big Tech’s market power. From the FTC’s ongoing effort to unwind Meta’s acquisitions of Instagram and WhatsApp to antirust suits like the one waged by Phhhoto Inc., a common theme emerges: whether dominant platforms are building markets or simply bending them to their will. Ollywan’s claims fit neatly into this broader narrative, suggesting that the fight over social commerce may become the next frontier in the clash between Silicon Valley’s giants and the startups that challenge them.
A representative for Meta declined to comment on the pending litigation.
The case is Ollywan Limited v Meta Platforms Inc., 5:25-cv-08215 (N.D. Cal.).
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