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India Startup Cut off From Facebook After U.S. Rival's Protest

  • Houzify Accuses Facebook of pulling plug without warning
  • U.S. rival Houzz filed trademark complaint in December

Houzify, a one-year-old home-decor startup backed by leading Indian technology industry names, said Facebook Inc. pulled the plug on its page after Sequoia Capital-backed rival Houzz Inc. complained of trademark infringements.

A copyright dispute between the interior design sites burst into the open after Houzify -- backed by Naveen Tewari, founder of Indian mobile ads platform InMobi Pte. -- said Facebook had wiped its presence without warning. As of Wednesday, the link to its page had been replaced with an error message saying it was broken or had been removed.

Startup founders have since expressed concern over Houzify’s assertion that Facebook acted unilaterally. The social network had already riled Internet companies in India earlier with its Free Basics service, which offered access to a limited swathe of pared-down Internet websites to users. Startups protested that such a plan would disadvantage smaller services. 

A spokesman for Facebook in India said the company was still investigating and had no further comment.

Houzify and Houzz both link home-owners with interior designers and suppliers, though the U.S. startup founded in 2009 has 35 million users to Houzify’s 120,000. The Palo Alto-based service backed by Sequoia, DST Global and Kleiner Perkins Caufield & Byers LLC asked Houzify in December to cancel its domain and re-brand a site it called “confusingly similar to the famous Houzz mark,” according to a legal notice from Houzz provided by the Indian company.

“We are committed to protecting our valuable brand and community from copycats through any available means, including identifying violations of third-party platform policies or when necessary taking legal action,” Gabriela Hebert, a spokeswoman for Houzz, said in an e-mailed statement. She didn’t respond to questions about whether the company had taken its complaint to Facebook.

Generic Issue

Houzify, which also counts former Infosys Ltd. executive Mohandas Pai as an investor, resisted those demands. It argued the words ‘house’ and ‘-ify’ were generic and saw no reason to comply. Instead, it offered to carry a temporary disclaimer and alter the font on its logo to settle the issue.

“They deleted our presence and cut us off from our 52,000 followers without checking the facts of the case and giving us no warning whatsoever,” Houzify co-founder and Chief Executive Officer Gunaseelan Radhakrishnan said by phone. The company still maintains an Internet website. “Facebook was our primary marketing channel.”

Facebook should not intervene in the fight between Houzz and Houzify, said Ganesh Balakrishnan, founder and chief marketing officer of mobile payments app Momoe.

“Many startups feel threatened” by Facebook’s apparent step, he said. “They should be made accountable for their actions.”

Sahil Barua, CEO and co-founder of logistics startup Delhivery, said the allegation signaled Facebook was acting as “judge, jury and executioner.”

“Today, Facebook sided with Houzz, tomorrow it could allow another big name to crush a small startup,” said Barua. “After the Free Basics fiasco, Facebook does not need any more bad publicity in India.”

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