Opinion: Is Meta’s Metaverse monopolization goal concerning?

Lavina Daryanani
Source: Pixabay


Less than a day back, The Federal Trade Commission announced that it was suing Meta in an attempt to stop it from monopolizing the metaverse. Meta, on its part, intends to acquire Within Unlimited Inc. and its VR fitness app Supernatural.

The FTC’s contentions

Per the FTC Bureau of Competition Deputy Director John Newman, Meta is “trying to buy its way to the top” rather than meritoriously throwing its hat in the VR-dedicated fitness app ring. In the formal statement, the FTC contended that the multinational technology conglomerate is already a key player at each level of the virtual reality sector.

“Meta already owns a best-selling virtual reality fitness app, and it had the capabilities to compete even more closely with Within’s popular Supernatural app. But Meta chose to buy market position instead of earning it on the merits.  This is an illegal acquisition, and we will pursue all appropriate relief.”

In fact, the agency also alleged that Meta and its CEO’s acquisition plans will suction out the competition in the market, and in turn, violate antitrust laws. Via the accusation, the complaint noted,

“Meta would be one step closer to its ultimate goal of owning the entire Metaverse.”

Metaverse: The apple of Meta’s eye?

With time, the metaverse has become one of Meta’s fortes. The company is quite bullish on the said technology. In fact, as outlined in a recent commentary, the co-founder and CEO of Meta, Mark Zuckerberg, tipped over the fate of the company ever since he announced last October that Facebook was going all-in on the metaverse. 

Owing to the transition, Facebook was rebranded to Meta. And now, the company envisages introducing people to shared virtual worlds and experiences via the metaverse using different software and hardware platforms.

Meta, undoubtedly, was bestowed with Facebook’s goodwill, and since its inception itself, it boasted popularity. However, having a silver spoon did not mean that Meta was served with success on a platter. The company is trying to find its feet and has been struggling to carve out a niche for itself in the space.

Meta’s Reality Labs division which makes virtual reality goggles, smart glasses, and other yet-to-be-released products, has been losing billions of dollars in the process of building its empire.

Mounting losses ain’t concerning

The net loss for the said segment amounted to $10.19 billion for 2021, an upward trend when compared to a $6.6 billion loss in 2020, and $4.5 billion in 2019. In fact, in the first quarter this year, Reality Labs posted a $2.9 billion loss, and per yesterday’s earnings call, the number stood around the same [$2.8 billion] in Q2 too.

The losses, however, hasn’t lowed Zuckerberg’s spirits. During the call, Meta’s executive suggested that these losses weren’t surprising and would prolong for several years. He, however, assured that such will be the case until the metaverse becomes more mainstream and mature.

He added,

“This is obviously a very expensive undertaking over the next several years. I’m confident that we’re going to be glad that we played an important role in building this.”

Meta’s rebuttal

Per WSJ, a Meta spokesperson said in a statement that the FTC’s case is based on speculation and is merely “sending a chilling message” to people who want to innovate in the virtual reality space. The spokesperson further said,

“The idea that this acquisition would lead to anticompetitive outcomes in a dynamic space with as much entry and growth as online and connected fitness is simply not credible. We are confident that our acquisition of Within will be good for people, developers, and the VR space.”

Here it is worth recalling that in 2020, Facebook was sued by the Trump-era administration for acquiring WhatsApp and Instagram for the same illegal monopolization reason. The said case is scheduled to go to trial late next year. 

Now, the latest filing is merely a depiction of how the current administration is circling back to the same point again, but without concrete or convincing reasons. Unlike last time, for starters, Meta is not wanting to acquire a lionized corporate giant.

At this stage, it seems like just because Meta possesses brand value, it’s being blamed. Trying to acquire startups is not an offense. That’s usually how businesses play their cards most of the time as they ascend up the corporate ladder.

It’s all about perspective

Well, competition in the metaverse space has been getting intense with time. Acknowledging the same, Zuckerberg recently asserted that Apple could pose as a prominent completion to Meta. He believes that both the companies were in a “very deep, philosophical competition.”

Alongside, other tech giants like Microsoft and Netflix are exploring the space too. So, in order to first survive and then thrive, Meta will have to remain a step ahead in the race. And perhaps with the acquisition, Meta intended to do the same.

Just when the space has started blooming with healthy competition, FTC’s allegations have come as a spoilsport, especially to tech advocates. Aaron Levie, CEO of file storage company Box, took Twitter to opine that if the FTC is successful this time, the startups will have to bear the brunt going forward, and innovation will take a hit.

The American Economic Liberties Project, a non-profit advocate of aggressive antitrust enforcement, on the other hand, expressed approval of the lawsuit. Per the group,

“This is the agency’s first challenge to a big tech merger, and it represents its new commitment to protecting fair competition in nascent digital markets.”

Flag of faith

The agency voted 3-2 to file the lawsuit in a federal court in California. Notably, the 5 members comprised of two Republicans and three Democrats including Chair Lina Khan. FTC’s official press release did not break down the vote, but Republican Commissioner Christine Wilson took Twitter to reveal that she was one of the two “dissenting” votes.

The past serves as a testament to how companies have fought tooth and nail with regulatory agencies to merely keep their heads above water. In fact, firms like Ripple and Grayscale continue to pursue cases against the Securities and Exchange Commission with the intention of being heard. And now, looks like Meta has no option left, other than treading on the same path for the greater good.