On Wednesday, the U.S. Federal Trade Commission (FTC) filed an antitrust lawsuit against Meta in an attempt to block Meta’s acquisition of virtual reality company Within, which developed the popular fitness app Supernatural.
“Just look at the company’s rebranding from Facebook to Meta in 2021 to understand its vision and future priorities,” the indictment reads. “This acquisition will bring Meta ‘closer to its ultimate goal of owning the entire Metaverse’. But instead of choosing to compete with its own VR-only fitness app, it made this illegal acquisition.” Terms of the deal were not disclosed.
The lawsuit underscores a disturbing fact about Meta’s quest to conquer the virtual world — more and more obstacles.
Zuckerberg may have instilled the word “Metaverse” on the masses, but despite Meta’s first-mover advantage, the company faces dangers from every angle : regulators, competitors, review issues, and the threat of being banned for years. An exhausted ecosystem of potential partners plagued by Facebook-related baggage.
Meanwhile, the company reported its first- ever revenue drop in its earnings report on Wednesday — a blow that’s been bolstered by Facebook’s mighty advertising machine for its ambitions for the Metaverse.
Meta declined to answer questions about the specific challenges it faces in enforcing the Metaverse vision, other than to comment on the FTC lawsuit.
“The FTC’s investigation is based on ideology and speculation, not evidence,” said company spokesman Christopher Sgro. The idea that a takeover could lead to anti-competitive results is simply not credible.”
Meta has good reason to be confident in its Metaverse. The company made an early bet on virtual reality in 2014 when it bought the then fledgling virtual reality platform Oculus for $2 billion. In addition, it has invested heavily in the Metaverse project.
Still, Reality Labs, the starting point for the company’s Metaverse efforts, lost more than $10 billion last year . Money and time don’t necessarily bring success, and other tech giants have tried: Alphabet’s attempt to launch Google Glass has failed, and Microsoft’s Hololens glasses have been tepid so far.
In this case, Meta first has to deal with its poor track record in content moderation . Facebook has struggled for years with harassment, extremism, violence and suicide on its social network, some of which have spilled over into the Metaverse.
Earlier this year, BuzzFeed News created a private domain test world in Meta’s Horizon World app, violating the company’s policy on hate speech. Even though it was reported as illegal, Meta’s administrators did not respond to it. In addition, many underage users are also flocking to Horizon World, and experts worry that bad actors will follow.
Zuckerberg sees Apple as a major adversary in Meta’s efforts to make the Metaverse the next big platform . There has been a rivalry between the two companies over the years. With Facebook’s spate of privacy scandals, Apple CEO Tim Cook criticized the social network’s advertising business, and Meta’s revenue was hit hard by the iPhone’s new privacy measures. To that end, Zuckerberg took a swipe at Apple, mocking the latter’s high prices for consumer devices.
Zuckerberg reportedly believes the two companies are gearing up for an even bigger battle, and one that has something extraordinary in it: about the future of the internet itself .
“Apple is going to be our competitor,” Zuckerberg said at the company’s all-hands meeting earlier this month, according to the tech website The Verge. “It’s not just because their devices are more capable than ours, it’s also because of this. It’s going to be a very deep philosophical contest about where the internet should go.”
Apple, on the other hand, has been mum on its plans for virtual and augmented reality — it also doesn’t use the term “Metaverse” — but rumor has it that the company will soon release a mixed reality headset. The device would be Apple’s first entry into a major new hardware category since launching the Apple Watch in 2015, and it would be a major step in the tech industry’s attempt to break new ground beyond smartphones.
In Zuckerberg’s view, Apple and Facebook’s visions for VR/AR are diametrically opposed .He told employees that Facebook intends to work with several different companies, while Apple will do everything itself — in line with the company’s approach with all other products.
Last month, Meta helped launch the Metaverse Standards Forum , a consortium of companies aimed at developing open standards and interoperability in the Metaverse, with high-profile members including Microsoft, Epic and Nvidia, but with one notable absence. , that is Apple. It’s also worth noting that whenever Facebook tries a big project that requires participation from multiple different partners, like its Libra cryptocurrency initiative, its efforts to build its own phone, or a connectivity project like Internet.org, those efforts All ended in failure.
While Zuckerberg is touting the openness of the Facebook Metaverse, Apple’s approach is also open in one very important aspect: its relationship with app developers, said Bob O’donnell, principal analyst at research firm Technalysis. “Meta is supported by a large number of developers, but there is still a big gap compared to Apple.” Bob O’donnellh also said that Meta will also be at a disadvantage in terms of privacy, while “Apple has a clear advantage from the beginning. “
In addition, Apple is also better at hardware sales . Jaron Lanier, a pioneer in the field of virtual reality, said he wanted Meta’s business model in the Metaverse to focus on selling devices and other goods, rather than relying on an advertising model that could be used to “sell influence.” This model has its limitations, as illustrated by Meta’s declining revenue, so the Metaverse could be an opportunity to try something different.
“But Meta is really just stuck on ideology right now,” he said.
However, Meta also faces challenges in selling hardware. The company said earlier this week that it would increase the starting price of the Meta Quest 2 from $300 to $400, a sign that it can no longer continue to subsidize its device business as it did before.
In contrast, Apple, possibly Meta’s strongest competitor in the Metaverse, has yet to release a related product.