Facebook’s antitrust woes appear to be growing. On Friday, Bloomberg reported that the US Federal Trade Commission and multiple states, led by New York, are investigating potential anticompetitive practices by virtual reality headset maker Oculus. Facebook, which renamed itself Meta in October, owns Oculus.
Citing people with knowledge of the matter, Bloomberg said investigators have been asking developers questions about how “the Oculus app store may be discriminating against third parties that sell apps that compete with Meta’s own software.”
The FTC and the New York Attorney General’s office declined to comment. Meta didn’t immediately respond to a request for comment.
The reported investigation could create a setback for the social media giant’s plans to create the metaverse, virtual spaces where people can work, play and socialize. It also highlights the increased US government scrutiny the company faces as it continues to grow.
This week, US District Judge James Boasberg denied Meta’s request to dismiss a revised antitrust complaint filed by the FTC, but he also signaled the agency will face an uphill battle when it comes to proving the allegations. The amended lawsuit, filed by the FTC in August, accuses the tech company of unlawfully maintaining its dominance in social networking by acquiring or eliminating companies it sees as competitive threats. Meta also owns popular photo service Instagram and messaging app WhatsApp. In the complaint, the FTC alleged that Facebook’s purchase of Instagram and WhatsApp have led to poorer services with decreased privacy and data protection, along with fewer consumer choices. Meta has said that its investment into both apps helped them grow and that “they have been good for competition.”
Last year, Boasberg dismissed a similar complaint filed by a group of state attorneys general. On Friday, the group filed an appeal brief arguing that the complaint shouldn’t have been dismissed and that the decision should be reversed.
“Mark Zuckerberg claims to be building the metaverse, but the actions of Facebook continue to cause significant harm to millions of consumers and many small businesses here in the real world,” said Attorney General Letitia James in a statement. “Time and again, the social media giant has used its market dominance to force small companies out of business and reduce competition for millions of users.”