FTC Probes Meta's VR Business for Antitrust Concerns

FTC Expands Antitrust Scrutiny to Meta’s VR Operations

In the wake of a significant legal advancement for the FTC’s antitrust lawsuit against Meta, the agency is now focusing its attention on the company’s virtual reality business segment.

Investigation into Potential Anti-Competitive Practices

Bloomberg has reported that the FTC, alongside attorneys general from several states, is conducting a probe into Meta’s VR division. This investigation centers around “potential anti-competitive practices” within the virtual reality market.

New York is reportedly leading the state-level component of this inquiry. Investigators are engaging with independent software developers who create applications compatible with Meta’s VR platform.

Focus on Market Suppression and Subsidies

State and federal authorities are examining whether Meta has engaged in actions designed to stifle competition within the VR landscape.

Specifically, officials are interested in the company’s strategy of subsidizing the Quest 2 VR headset. The aim of this strategy appears to be increasing consumer adoption while simultaneously hindering competitors.

Beyond Acquisitions: A Broader Antitrust Case

The FTC’s investigation extends beyond Meta’s acquisition activities. This suggests that the company’s practices concerning its app store, hardware, and software are also under scrutiny.

This broader focus indicates that the potential antitrust case could be a defining moment for the future of internet businesses.

Scrutiny of the Supernatural Acquisition

In December, reports surfaced indicating that the FTC was reviewing Meta’s planned acquisition of Supernatural, a VR fitness application. The proposed deal was valued at over $400 million.

FTC Antitrust Case Against Meta Proceeds

A recent judicial ruling allowed the FTC’s major antitrust case against Facebook (Meta’s parent company) to move forward. Meta’s attempt to dismiss the lawsuit was unsuccessful.

Previously, Facebook had requested the court to dismiss the case and also sought the recusal of FTC Chair Lina Khan, a known advocate for breaking up large technology companies.

Allegations of Monopolistic Behavior

The FTC alleges that Facebook has misused its market dominance to suppress competition in the social media sector. The agency is seeking a court order requiring Meta to divest itself of Instagram and WhatsApp.

Judge’s Assessment of the Case

U.S. District Judge James Boasberg stated that the evidence presented to support the allegations is “far more robust and detailed than before,” particularly regarding the alleged monopoly.

The judge concluded that while the FTC faces challenges in proving its claims, it has met the initial requirements for proceeding with discovery.