Mark Zuckerberg’s Metaverse plans run into a major roadblock
When Mark Zuckerberg set his company on the path to the metaverse, he must have known there was no turning back.
Changing the company’s name from Facebook (a brand name that was recognized globally) to Meta drove the point home. Social media on devices with screens represents the past. The future lies in virtual reality.
He must also have known that the road ahead would be full of pitfalls, both technical and regulatory.
Meta’s stock has suffered tremendously since then as investors seem less confident about the company’s future amid rising expenses and shrinking profits.
Analysts estimated earlier this year that the company has already spent $16 billion developing the metaverse, and Zuckerberg, for his part, has remained an ardent evangelist.
“I feel even more strongly now that the development of these platforms will unlock hundreds of billions if not trillions of dollars over time,” Zuckerberg told analysts during the second-quarter earnings call last July.
But the obstacles in Meta’s path to the metaverse are greater than just technical and financial.
Regulators in the US, and potentially around the world, will also have a major impact on the company’s journey.
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 virtual reality dedicated fitness app, Supernatural.
“Instead of competing on merit, Meta is trying to buy its way to the top,” said John Newman, assistant director of the FTC Bureau of Competition at the time.
“Meta chose to buy market position rather than earn it on the merits. This is an illegal acquisition and we will pursue all appropriate relief.”
On Thursday, the agency said it will ask a judge to stop the acquisition through an injunction.
US District Judge Edward Davila will hear arguments and testimony over a 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 metaverse is pretty empty. It relies on developers to create products and experiences that users will be willing to ditch mobile and laptop screens for, and so far in its infancy, it hasn’t yet attracted an audience.
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) rather than developing its own technology.
The FTC says it may have worked, with little pushback from the same agency, in real life, but it doesn’t want the strategy to fly in virtual reality.
Citing Oculus in its complaint against Meta, the FTC says 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 most popular VR apps. 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 US markets for fitness and dedicated VR apps,” according to the FTC.
Meta did not immediately return a request for comment on the FTC’s actions.
“This is an illegal acquisition and we will pursue all appropriate relief,” Newman said.