When Mark Zuckerberg set his company on the path to the metaverse, he must have known there was no going back.
Changing the name of his company from Facebook (a brand that was globally recognized) to Meta drove the point home. Social media on screen devices is a thing of the past. The future is in virtual reality.
He must also have known that the road ahead would be fraught with pitfalls, both technical and regulatory.
Meta’s stock has suffered tremendously since then as investors appear uncertain about the company’s future amid rising costs and declining profits.
Analysts estimated earlier this year that the company had already spent $16 billion developing the meta version, and Zuckerberg, for his part, remained an ardent evangelist.
“I feel even more strongly now that the development of these platforms will unlock hundreds of billions of dollars, if not trillions, over time,” Zuckerberg told analysts during a second-quarter earnings call last July.
But the obstacles to Meta’s path to the metaverse are bigger than just technical and financial.
Regulators in the US and potentially around the world will also have a big say in the company’s path.
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The FTC case is moving forward
Earlier this summer, the Federal Trade Commission said it would seek to block Meta’s acquisition of virtual reality app Within Unlimited and its popular fitness app Supernatural.
“Instead of competing on merit, Meta is trying to buy its way to the top,” John Newman, the FTC’s deputy director for competition, said at the time.
“The meta chose to buy a market position rather than earn it on merit. This is an illegal acquisition and we will seek all appropriate assistance.”
On Thursday, the agency said it would ask a judge to stop the acquisition through an injunction.
US District Judge Edward Davila will hear arguments and testimony during the two-week trial in San Jose, California, and Zuckerberg himself is listed as a potential witness, the Wall Street Journal reported.
The Metaverse is meant to be 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 meta is pretty empty. It relies on developers to create products and experiences that will make users willing to put down their mobile and laptop screens, and has yet to draw a crowd in its infancy.
Meta’s plan to buy developers to help its virtual world is in line with the company’s previous strategy of buying popular competitors (Instagram and Whatsapp) instead of developing its own technology.
The FTC says it may have worked, with a little pushback from the same agency, in reality, but it doesn’t want the strategy to fly in virtual reality.
The FTC cites Oculus in its complaint against Meta, saying the company already sells the most widely used VR headset, operates one of the most popular VR app stores, and already owns a portfolio of popular VR apps, including Beat Saber, one of the best-selling VR apps of all time.
If Meta is able to buy Within, it will always stifle competition and “stifle innovation in the dynamic, fast-growing U.S. fitness app and niche fitness VR markets,” according to the FTC.
Meta did not immediately return a request for comment on the FTC’s hearing.
“This is an illegal acquisition and we will seek all appropriate assistance,” Newman said.
