FTC sues Meta to stop Zuckerberg from acquiring a VR Company

The FTC (Federal Trade Commission) filed a lawsuit against Meta and its CEO Mark Zuckerberg in the Northern District of Carolina. As per the agency, this move is taken against Meta, questioning its motives to crush any competition in the virtual reality market and stop Meta’s monopolization in the metaverse.

FTC files Lawsuit against Mark Zuckerberg and Meta

This move is identical to what was witnessed back in 2020 when the FTC filed a complaint against Facebook for its purchase of Instagram and Whatsapp as a clear attempt to own the competition in the social media market.

Also read, Zuckerberg, says Meta is in deep philosophical competition with Apple

FTC Arguments for the Lawsuit

Meta’s potential investment in the virtual reality company Within, along with its fitness app Supernatural, has raised some red flags. The FTC believes the move is illegal, as per the US antitrust laws.

The officers at the agency indicate that this move demonstrates that Meta is trying to buy its way to the top of the virtual reality market instead of tackling the competition on its own merit. Statements released by the FTC officials present that this is just one of the several moves Meta is planning to take to gain a monopoly in the Virtual Reality universe or the metaverse.

The objection also mentions, that as Meta fully recognizes, network effects on a digital platform it can cause the platform to become more powerful and make its rivals weaker and less able to seriously contend as it gains more users, content, and developers.

In addition, the complaint mentions that the acquisition of new users, content, and developers each feed into one another, building a self-reinforcing cycle that entrenches the company’s early lead. This market dynamic can spur companies to contend harder in beneficial ways by, for example, adding useful product features or hiring additional employees.

FTC states that it plans to block Meta’s endeavors to acquire Within and thus sustain healthy competition which will ultimately benefit consumers. The official agency statement suggests that the prospect of Meta entering the fitness business via virtual reality has influenced the competition and consumers. Meta buying the biggest rival in this domain will only break this competitive chain. FTC has planned to move against Meta in this regard in the same way as it did in 2020 for the acquisition of Whatsapp and Instagram.

Meta has started aggressively pushing forward in developing the metaverse as it has plans to launch a payment platform that supports crypto payments. The brick-and-mortar store where people can purchase hardware for the virtual reality space in the San Francisco Bay Area is another landmark for the company. And with this court case moving forward-unless the judgment is rolled out against Meta, the company is all set to acquire Within on August 1.

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