FTC files lawsuit against Meta over attempted monopolization of metaverse

FTC files lawsuit against Meta over attempted monopolization of metaverse

In an effort to stop Meta and its CEO Mark Zuckerberg from “its ultimate goal” of owning all the “metaverse,” the United States Federal Trade Commission (FTC) has filed a lawsuit against the social media giant.

FTC filed a complaint in the Northern District of California Wednesday alleging that Meta and Zuckerberg attempted to acquire virtual reality company Within and its fitness app Supernatural. According to U.S. Antitrust Laws, this was a way for the social media company to “buy its path to the top” and “buy its way into the market for virtual reality dedicated fitness apps.” However, instead of buying Within, Meta chose to purchase Supernatural. This would be detrimental to “future innovation” and competition among American companies.

Meta fully acknowledges that network effects can lead to a platform becoming more powerful and making its competitors less competitive. As it gains more users and content, developers, and developers, the complaint states. “The acquisitions of new users, developers, and content all feed into each other, creating a self-reinforcing circle that cements the company’s early lead. This market dynamic can help companies compete more effectively by adding new features to their products or hiring additional staff.

In an effort to encourage competition and assist consumers, the FTC stated it would block Meta’s acquisition by Within.

If Meta is allowed to buy Within, that will reduce the competitive pressure. If Meta is allowed to buy Within, that competitive pressure will slacken.”FTC seeks to block virtual reality giant Meta’s acquisition of popular app creator Within: https://t.co/b87juAolBw
FTC (@FTC), July 27, 2022

Meta’s alleged acquisition of any potential threats to its bottom lines is not a new move. The FTC filed a complaint in 2020 against Facebook for “anticompetitive behavior” in relation to its $19 billion acquisition in 2014 of WhatsApp and $1 billion purchase in 2012 of Instagram. It cited similar concerns about stifling innovation. The apps that handled messaging and photo sharing were alleged to be rivals of Facebook’s main platform and Messenger app.

According to the FTC, “Facebook’s $1 billion acquisition of Instagram in April 2012 allegedly both neutralizes Instagram’s direct threat and makes it harder for another personal social network competitor to gain scale.” “Its acquisition of WhatsApp is said to both eliminate the possibility that WhatsApp might be a threat to Facebook’s social networking monopoly, and make it more difficult for any future threat to gain scale in mobile messaging.

Related: Experts disagree on the place of virtual reality in the Metaverse

Facebook changed its name to Meta in October 2021. The social media company has been announcing many initiatives that will help it expand into the metaverse. This includes the possibility of launching a cryptocurrency-supporting payments platform. Meta opened a brick and mortar store in San Francisco Bay Area that sells hardware for virtual reality.

The complaint states that unless the court prevents Meta from purchasing Within, the sale will likely take place on Aug. 1.

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