Answering Essay and Problem Questions
January 29, 2022
Book Review: ReviseSQE
January 31, 2022
Article by Will Brookes
It goes without saying that commercial law firms provide essential services to various clients. In an increasingly complicated commercial landscape, they are the enablers that allow the global economy to function seamlessly. This necessity, combined with the extensive knowledge and expertise required to practice law, leads to extremely high fees. Most would say this is fair. At the very least, it is the free market functioning as it ought to.
That being said, there is an unfortunate byproduct of this in that larger firms can take advantage of these legal fees to effectively bully smaller firms and startups. This is nothing new; legal fees can always be an obstacle to justice in certain situations. However, the issue becomes even more severe when competition within markets is limited due to the larger firms throwing their weight around. This is the case with Muzmatch and its effort to fight a lawsuit filed by Match Group.
The Case
In 2011, Shahzad Younas founded ‘Muzmatch’ before quitting his job at Morgan Stanley to work on it full time in 2014. In its own words, Muzmatch is “the world’s biggest community for single Muslims to find their perfect partner,” with features that allow users to filter others based on factors such as sect, ethnicity and religiosity. Overall, it is a remarkable story. He took a significant risk, learning to code from scratch and building the IOS and Android apps in his bedroom. After a while, the organic and exponential growth of the app attracted interest from some venture capital firms and the match-making giant Match Group. For context, Match Group is the conglomerate behind Tinder, Hinge and OK Cupid. It employs 2000 people worldwide and was recently added to the S&P 500. After failing to acquire Muzmatch, the conglomerate turned to ‘Harmonica’ in 2019 – one of Muzmatch’s competitors.
Alongside multiple bids to acquire Muzmatch, Match Group continuously pursued a claim against the former on the basis that they had infringed upon their copyright. The legalities of this claim are complicated, but, in essence, Match Group object to the use of the keyword ‘match’ in Muzmatch’s metadata. Supposedly, this is an attempt to increase engagement by taking advantage of Match Group’s registered marks.
Younas and Muzmatch are still committed to fending off these claims, just as they resisted multiple offers from Match Group, with the last being over $35m. Crucially, Younas maintains that Muzmatch must continue to be representative of the demographic it serves, namely Muslims. In a statement, he wrote:
“We fight, because we must. It is crucial that products built for our community are built BY our community, and that we do not allow ourselves to be dictated and controlled by others.”
Therefore, the legal battle has taken on a different dimension as Younas highlights the ethical issues regarding ownership of niche matchmaking services such as this one. This also goes some way to explaining why he never accepted any of Match Group’s offers to buy Muzmatch. Younas has also pointed out that they have used a similar technique with Bumble, offering to buy them and – after being rebuffed – suing them for the use of ‘swiping’ as a feature of their app.
The Result
Regrettably, Muzmatch could not challenge Match Group’s lawsuit in the US due to the comparatively high cost of litigation, resulting in a settlement agreement. The details of this agreement are unclear. Despite this, Muzmatch is still fighting the UK case with a trial at the UK IPEC scheduled for 17th/18th January. Unfortunately, the outcome will inevitably leave Muzmatch a lot worse off. A loss will result in various changes to the app, including the name itself and the possibility of material damages. A win would mean they had “wasted nearly £1m on unnecessary unrecoverable legal fees.”
It is difficult to determine whether or not Match Group’s depiction of Muzmatch as a “tinder clone” is justified. Admittedly, the colour schemes are very similar, and the apps function remarkably similarly. However, it is clear that this case demonstrates in microcosm how the legal system is weighted against smaller businesses that do not have the funds to risk pursuing litigation in multiple jurisdictions. This can limit the functionality of the free market in industries with high barriers to entry, such as online dating. We see this in the Muzmatch case as – if Match Group is successful – they will seriously hinder the growth of a smaller competitor.
It remains to be seen whether or not Muzmatch will be successful later this month but, regardless of the outcome, there are some lessons to be learned from the case.
