FTC Files Lawsuit Against Meta for Attempted Metaverse Monopolization
The government watchdog previously filed a complaint against the social media giant in 2020 for alleged 'anti-competitive conduct' in its acquisitions from WhatsApp and Instagram.< /p>
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The U.S. Federal Trade Commission, or FTC, has filed a lawsuit against Meta and CEO Mark Zuckerberg in an effort to stop the social media giant from achieving "its ultimate goal of owning the entire "metaverse".
In a lawsuit filed Wednesday in the Northern District of California, the FTC alleged that Meta and Zuckerberg's potential acquisition of virtual reality company Within and its fitness app Supernatural was illegal under U.S. antitrust laws and a way for the social media company to "buy its way to the top" as opposed to "compete on the merits". The complaint alleged that under Zuckerberg, Meta was "a potential entrant into the VR-dedicated fitness app market" with the resources to develop its own app, but instead opted to own Supernatural by purchasing Within. The move would hamper "future innovation and competitive rivalry" between companies in the United States.
"As Meta fully acknowledges, network effects on a digital platform can make the platform more powerful - and its rivals weaker and less able to compete seriously - as it gains more users, content and developers," the complaint stated. . "The acquisition of new users, content, and developers feeds into each other, creating a cycle of self-reinforcement that reinforces the company's lead. This market dynamic can encourage companies to be more competitive in advantageous ways, for example by adding useful features to the product or by hiring additional employees."
The FTC said it plans to block Meta's acquisition of Within in an effort to promote competition and help consumers:
"The mere possibility of Meta's entry has likely influenced competition in the VR fitness app market. If Meta is allowed to buy Within, this competitive pressure will ease."
The government watchdog previously filed a complaint against the social media giant in 2020 for alleged 'anti-competitive conduct' in its acquisitions from WhatsApp and Instagram.< /p>
New
The U.S. Federal Trade Commission, or FTC, has filed a lawsuit against Meta and CEO Mark Zuckerberg in an effort to stop the social media giant from achieving "its ultimate goal of owning the entire "metaverse".
In a lawsuit filed Wednesday in the Northern District of California, the FTC alleged that Meta and Zuckerberg's potential acquisition of virtual reality company Within and its fitness app Supernatural was illegal under U.S. antitrust laws and a way for the social media company to "buy its way to the top" as opposed to "compete on the merits". The complaint alleged that under Zuckerberg, Meta was "a potential entrant into the VR-dedicated fitness app market" with the resources to develop its own app, but instead opted to own Supernatural by purchasing Within. The move would hamper "future innovation and competitive rivalry" between companies in the United States.
"As Meta fully acknowledges, network effects on a digital platform can make the platform more powerful - and its rivals weaker and less able to compete seriously - as it gains more users, content and developers," the complaint stated. . "The acquisition of new users, content, and developers feeds into each other, creating a cycle of self-reinforcement that reinforces the company's lead. This market dynamic can encourage companies to be more competitive in advantageous ways, for example by adding useful features to the product or by hiring additional employees."
The FTC said it plans to block Meta's acquisition of Within in an effort to promote competition and help consumers:
"The mere possibility of Meta's entry has likely influenced competition in the VR fitness app market. If Meta is allowed to buy Within, this competitive pressure will ease."
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