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“Big Is Bad”
On the one hand, Meta and his huge appetite. On the other hand, Within, a start-up with 60 employees, based in Los Angeles, known for its fitness programs in virtual reality. And for its use, Supernatural became famous during confinement. An unfair game? At least that’s what the US competition authority is criticizing, which last July vetoed the operation and opened an “illegal acquisition” investigation against Meta.
The authority’s statement is strict, but well-argued. “Meta already has its own fitness app,” said John Newman, director of the Competition Bureau at the Federal Trade Commission (FTC). Indeed, Mark Zuckerberg’s group has a video game called Beat Sabre, which has many similarities to the one developed by Within. “Meta chose to buy its position in the market rather than earn it on its own merits,” the authority charged in its indictment published on July 27.
It’s time to go the distance. Supernatural Boxing is here – a whole new way to work your mind and body in Supernatural.
Athletes, come get your gloves 🥊 pic.twitter.com/VPBohIsVFH
— Supernatural (@getsupernatural) 26 October 2021
Heavy charges, denied by Meta’s lawyers who decry “baseless lawsuits”. Never before has a Silicon Valley giant had to answer such charges before the FTC. While in Paris, Meta’s public policy and competition chief, Marianela López-Galdos, did not mince words. At this conference by the law firm Dechert LLP, which was attended by Challengesthe director denounced to several European Commission officials an investigation “motivated by ideology”.
Thinly veiled allusion to the president of the FTC, Lina Khan, who has become Meta’s true pet. The relationship between Mark Zuckerberg and Lina Khan has taken an increasingly confrontational turn. The two personalities have never hidden their deep enmity. At the time of his appointment, Meta had gone so far as to request the disqualification of Lina Khan, who was considered too hostile to his interests. “Throughout his career, the president has consistently and publicly concluded that Facebook was guilty of violating antitrust laws,” Meta said in a letter to the FTC.
Meta, fight in spite of yourself?
The showdown started by the FTC with Mark Zuckerberg promises to be long. But several experts fear that the charges against Meta are not strong enough to cancel the sale. Since August, the regulator has actually already reconsidered some of its arguments. The charges of “illegal acquisition” were thus withdrawn. The FTC now prefers to plead the absence of “potential competition” between two competing players in an “emerging market,” that of virtual reality applications.
A warning which strengthens Meta’s position. In his latest indictment, Mark Zuckerberg is no longer personally prosecuted by the FTC, which has reviewed his case. A first victory for the founder of Facebook, who mobilized an army of lobbyists to convince the authorities to defend him. Thus, on December 2, the group called on Washington not to introduce excessive regulations against the sector so as not to “restrict innovation” in virtual reality.
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Since changing its name last year, Meta has increased its investment in virtual reality. The American giant has already owned virtual reality headset maker Oculus since 2014. An acquisition by Facebook for $3 billion from its founder, Brendan Iribe. App developers also rely on Meta to sell their products on Oculus – the number one seller of consumer VR headsets – where the company takes a 15-30% commission.
It wouldn’t be the first time regulators have prevented Meta from pursuing one of its investments. In 2019, the SEC had already buried Libra, Facebook’s cryptocurrency project. But it is Europe that has so far been hit the hardest. In October, the British market authority forced the group to sell its subsidiary Giphy, which specializes in animated images.
Separately, penalties for Meta in Europe could reach more than two billion euros this year in Europe for privacy violations, Politico claims. After buying Instagram and WhatsApp in 2014, Facebook’s monopoly in online advertising is increasingly being challenged. A dominance which at the time had not attracted the attention of the regulators.
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