When Mark Zuckerberg set his company on the path to the metaverse, he must have known there was no turning back.
Changing the name of his company from Facebook (a globally recognized brand) to Meta helped him achieve success. Social media on devices with screens represents the past. The future lies in virtual reality.
Surely he also knows the road ahead will be full of pitfalls, both technical and regulatory.
Meta’s stock has been hit hard since investors seem less certain about the company’s future amid rising costs and shrinking profits.
Analysts estimated earlier this year that the company has spent 16 billion dollars on developing the metaverse, and for his part, Zuckerberg remains a passionate evangelist.
“I feel even more strongly now that developing these platforms will bring in hundreds of billions of dollars if not trillions of dollars over time,” Zuckerberg said. told analysts during their second-quarter earnings call last July.
But the obstacles on Meta’s path to the metaverse are not just technical and financial.
Regulators in the United States and potentially worldwide will also have a large say in the company’s journey.
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Where the FTC moves forward
Earlier this summer, the Federal Trade Commission said it would seek to block Meta’s acquisition of virtual reality app Inside Unlimited and its popular virtual reality-specific fitness app, Supernatural.
“Instead of competing on merit, Meta is trying to take the lead,” said John Newman, deputy director of the FTC’s Competition Bureau. at that time.
“Meta has chosen to buy position in the market rather than earn it based on value. This is an illegal acquisition and we will pursue all appropriate relief measures.”
On Thursday, the agency said it would ask a judge to stop the acquisition through the injunction.
US District Judge Edward Davila will hear arguments and testimony during a two-week trial in San Jose, California, and Zuckerberg himself is listed as a potential witness, The Wall Street Journal report.
Metaverse is seen as an immersive digital world, accessible through virtual reality hardware such as VR headsets from Oculus, which Meta (Facebook) also bought in 2014 for $2 billion.
But right now, the metaverse is pretty empty. It relies on developers creating products and experiences that users will be willing to give up their mobile and laptop screens, and so far, in its infancy, it has not really attracted many people yet.
Meta’s plan to buy developers to support the virtual world is in line with the company’s previous strategy of buying well-known competitors (Instagram and Whatsapp) rather than developing its own technology.
That might have worked in practice, the FTC said, with little response from the agency itself, but it doesn’t want that strategy to fly in virtual reality.
The FTC cites Oculus in its complaint against Meta, saying that the company sold the most widely used VR headset, operated one of the most popular VR app stores, and owned a portfolio of apps. Popular VR apps, including Beat Saber, one of the best-selling VR apps of all time.
According to the FTC, if Meta can buy Inside, competition will always be stifled and “decreasing innovation in the dynamic, fast-growing US market for VR applications for fitness and specialized gymnastics”.
Meta did not immediately respond to a request for comment on the FTC’s actions, but said in a Nov. 21 filing that it is confident that “the acquisition of Inside will be good for everyone, developers and the VR space is experiencing intense competition.”
“This is an illegal acquisition and we will pursue all appropriate relief measures,” Newman said.
