On Friday, the U.S. Federal Trade Commission (FTC) and several states, led by New York, are investigating virtual reality headset maker Oculus for potentially anticompetitive behavior, according to Bloomberg. Facebook, which changed its name to Meta in October, owns Oculus.
Investigators have been asking developers how the Oculus app store discriminates against third parties who sell apps that compete with Meta’s own software, Bloomberg reported, citing people familiar with the matter.
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The FTC and the New York Attorney General’s Office declined to comment. Meta did not immediately respond to a request for comment. The investigation could reportedly set back the social media giant’s plans to build a metaverse, a virtual space where people can work, play and socialize. It also underscores the increased U.S. government scrutiny the company faces as it continues to grow.
This week, U.S. District Judge James Boasberg rejected Meta’s request to dismiss the FTC’s revised antitrust charges, but he also indicated the agency will face an uphill battle in proving them. The revised lawsuit, filed by the FTC in August, accuses the tech company of illegally maintaining its dominance in social networking by acquiring or “eliminating” companies it deems a competitive threat.
Meta also owns the popular photo service Instagram and messaging app WhatsApp. In its complaint, the FTC said Facebook’s acquisition of Instagram and WhatsApp resulted in poorer service, less privacy and data protection, and less choice for consumers. Meta has said that its investment in the two apps helps them grow, “and they’re good for the competition.”
Last year, Boasberg dismissed a similar complaint filed by a group of state attorneys general. On Friday, they appealed, arguing that the lawsuit should not be dismissed and the ruling should be overturned. Mark Zuckerberg claims to build the metaverse, but Facebook’s actions continue to cause significant harm to millions of consumers and many small businesses in the real world,” New York Attorney General Letitia James said in a statement. “Time and time again, the social media giant has used its market dominance to force smaller companies out of business and reduce competition for millions of users.”