FTC, multiple states investigating potential anticompetitive practices by VR headset maker Oculus

The Federal Trade Commission and multiple states are investigating the Mark Zuckerberg-owned virtual reality unit Oculus over anti-competitive practices. 

The Oculus is owned by Meta, the new company name of Zuckerberg’s Facebook and the world’s largest social media company. 

Led by New York Attorney General Letitia James’ office, outside developers who make apps for the VR tech have been questioned as part of the inquiry. . 

Antitrust lawmakers asked developers about the possibility that the Oculus app store is discriminating against third-parties that sell apps in competition with Meta’s software.

Other subjects of discussion include Meta’s sales plan – selling its headset for well below other models at $299 – for the Oculus headset undercutting competitors. 

FTC Commissioner nominee Lina M. Khan is leading the investigation against Meta to see if they’re slowing down third party developers

The Oculus headset is dominating the current market within VR hardware, making up 75 percent of global shippings as of 2021

New York, Tennessee and North Carolina are among the states joining the FTC in investigating. Meta had similarly faced scrutiny from former President Donald Trump’s Department of Justice.    

Representatives for Meta and the New York and Tennessee attorneys general have not responded to requests for comment. The FTC and the North Carolina Attorney General declined comment.

The company changed its name from Facebook to Meta back in October as part of the building of what Meta CEO Mark Zuckerberg calls ‘the metaverse’ –  immersive digital worlds accessed through virtual and augmented reality-powered devices.

Developers argue that Mets uses its power on social media to stop companies from competing with them and copies promising ideas. They also allege that Meta makes it harder for some third party apps to work correctly on the Oculus. 

Cix Liv, the creator of the fitness tracking app Yur Inc., said that it began to lose traction when Meta put out a software update that stopped the technology from working within games. 

New York Attorney General Letitia James’ office is one of several states investigating Meta by interviewing third party developers

Facebook changed its name to Meta in October of 2021. Their social media empire includes Facebook, Instagram and WhatsApp

Liv then said Meta delivered another blow when they released Oculus Move, a very similar app.   

Guy Godin, a developer of a virtual desktop app, said he was similarly crushed by Mets. 

These investigations are part of the United States government’s quest to regulate Big Tech for conduct that they say undermines competition in the marketplace. 

The FTC filed an amended complaint against Meta in 2021 arguing the company eliminates competitors by buying them.

The suit is an attempt to unwind the company’s acquisitions of WhatsApp and Instagram. Meta bought Oculus in 2014 for $2billion.  

Meta employee Elza Uzmanoff tries out an Oculus device at the company’s corporate headquarters campus in Menlo Park, California

Oculus is the leader in the virtual reality space, as it currently makes up 75 percent of global shipments of headsets. 

Similar to smartphones, Oculus offers an app store that displace both Meta-developed and third-party apps. Oculus gets 30 percent of all sales.