{"id":12483,"date":"2022-07-27T22:18:16","date_gmt":"2022-07-27T22:18:16","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/ftc-files-lawsuit-against-meta-over-attempted-monopolization-of-metaverse\/"},"modified":"2022-07-27T22:18:18","modified_gmt":"2022-07-27T22:18:18","slug":"ftc-files-lawsuit-against-meta-over-attempted-monopolization-of-metaverse","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/ftc-files-lawsuit-against-meta-over-attempted-monopolization-of-metaverse\/","title":{"rendered":"FTC files lawsuit against Meta over attempted monopolization of metaverse"},"content":{"rendered":"

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The United States Federal Trade Commission, or FTC, has filed a lawsuit against Meta and CEO Mark Zuckerberg in an attempt to stop the social media giant from \u201cits ultimate goal of owning the entire \u2018metaverse\u2019.\u201d<\/p>\n

In a complaint filed in the Northern District of California on Wednesday, the FTC alleged Meta\u2019s and Zuckerberg\u2019s potential acquisition of virtual reality firm Within and its fitness app Supernatural was illegal according to U.S. antitrust laws and a way for the social media firm to \u201cbuy its way to the top\u201d as opposed to \u201ccompeting on the merits.\u201d The complaint alleged that under Zuckerberg, Meta was \u201ca potential entrant in the virtual reality dedicated fitness app market\u201d with the resources necessary to develop its own app, but instead chose to own Supernatural by purchasing Within. The move would allegedly hinder \u201cfuture innovation and competitive rivalry\u201d among companies in the United States.<\/p>\n

\u201cAs Meta fully recognizes, network effects on a digital platform can cause the platform to become more powerful \u2014 and its rivals weaker and less able to seriously compete \u2014 as it gains more users, content, and developers,\u201d said the complaint. \u201cThe acquisition of new users, content, and developers each feed into one another, creating a self-reinforcing cycle that entrenches the company\u2019s early lead. This market dynamic can spur companies to compete harder in beneficial ways by, for example, adding useful product features or hiring additional employees.\u201d<\/p>\n

The FTC said it planned to block Meta\u2019s acquisition of Within in an effort to promote competition and help consumers:<\/p>\n

\u201cThe mere possibility of Meta\u2019s entry has likely influenced competition in the virtual reality dedicated fitness app market. If Meta is allowed to buy Within, that competitive pressure will slacken.\u201d<\/p><\/blockquote>\n

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FTC seeks to block virtual reality giant Meta\u2019s acquisition of popular app creator Within: https:\/\/t.co\/b87juAolBw<\/p>\n

\u2014 FTC (@FTC) July 27, 2022<\/a><\/p><\/blockquote>\n

Meta\u2019s move toward allegedly acquiring any potential threats to its bottom line is nothing new. In 2020, the FTC filed a complaint against Facebook \u2014 before the firm rebranded to Meta \u2014 for \u201canticompetitive conduct\u201d for its $19 billion acquisition of WhatsApp in 2014 and $1 billion purchase of Instagram in 2012, citing similar concerns around stifling innovation. Both apps, handling messaging services and photo sharing, respectively, were alleged rivals to Facebook\u2019s Messenger app and main platform. <\/p>\n

\u201cFacebook\u2019s acquisition of Instagram for $1 billion in April 2012 allegedly both neutralizes the direct threat posed by Instagram and makes it more difficult for another personal social networking competitor to gain scale,\u201d said the FTC at the time. \u201c[Its] acquisition of WhatsApp allegedly both neutralizes the prospect that WhatsApp itself might threaten Facebook\u2019s personal social networking monopoly and ensures that any future threat will have a more difficult time gaining scale in mobile messaging.\u201d<\/p>\n

Related: <\/em><\/strong>Experts clash on where virtual reality sits in the Metaverse<\/em><\/strong><\/p>\n

Since Facebook rebranded to Meta in October 2021, the social media firm has announced many initiatives focused on expanding into the metaverse, including potentially launching a payments platform with support for cryptocurrency. In May, Meta opened a brick-and-mortar store in the San Francisco Bay Area which sells hardware for the virtual reality space. <\/p>\n

Unless the court stops Meta from acquiring Within, the sale would likely go through on Aug. 1 according to the complaint.<\/p>\n