Following news that the FTC’s antitrust lawsuit against Meta cleared a critical hurdle earlier this week, the agency also appears to be taking a keen interest in the company’s virtual reality business.
Bloomberg reports that the FTC and several state attorneys general are investigating Meta’s virtual reality division for “potential anti-competitive practices.” New York is reportedly leading the state-level investigation, which spoke with outside software developers who are building apps for Meta’s VR experience.
State and federal officials are examining how the company may have engaged in anti-competitive behavior to suppress competition in the virtual reality market. Officials were also interested in how the company subsidizes the price of its Quest 2 VR headset to push it on consumers and eliminate competition, according to Bloomberg.
The fact that the FTC is investigating the practices of Meta’s app store, hardware and software suggests that the company’s acquisitions aren’t its only angle in what could be a landmark antitrust case that defines the next era of internet businesses.
In December, The Information reported that the FTC was reviewing Meta’s proposed acquisition of Supernatural, a VR fitness app, in a deal worth more than $400 million.
Earlier this week, a judge ruled that the FTC’s main antitrust case against Facebook (owned by parent company Meta) could proceed, dismissing the company’s efforts to block it. In December, Facebook asked the court to dismiss the lawsuit and pushed FTC Chairwoman Lina Khan, a big tech split-off advocate, to recuse herself.
In the lawsuit, the FTC accuses Facebook of abusing its market power to suppress rivals in the social media space and goes so far as to ask a judge to compel parent company Meta to divest itself of Instagram and from WhatsApp.
“The facts alleged this time to bolster these theories are, however, far more robust and detailed than before, particularly with respect to the contours of defendant’s alleged monopoly,” U.S. District Judge James Boasberg wrote.
“…While the agency may face an arduous task in proving its claims, the Court believes that it has now cleared the bar of pleadings and can proceed with discovery.”