American social media conglomerate corporation Facebook Inc. has been accused by Virtual-reality startups of using a familiar playbook to muscle out rivals. Virtual reality could be the digital platform of the future, and these accusations on Facebook have prompted a new line of scrutiny from U.S. competition enforcers.
Facebook acquired Oculus in 2014 for $2 billion, which has helped them on the way to becoming the world’s biggest virtual-reality hardware maker. But the Justice Department’s antitrust division has now been drawn towards its practices, according to two people familiar with the matter.
This new investigation of Facebook’s virtual-reality business reflects broader concerns that the company has grown too powerful. During a hearing with Facebook CEO Mark Zuckerberg, one U.S. lawmaker assigned the company’s supremacy to a simple tactic: Copy, acquire, and kill any company that seems like a competitive threat.
Facebook is pushing hard to establish its presence in virtual reality. Simultaneously, software developers and startup founders say that the company is now using that same playbook to undermine competition there. The Virtual reality market represents a unique opportunity for the social media pioneer to lead the world into the next state-of-the-art platform.
The Federal Trade Commission (FTC) is reportedly preparing to bring an antitrust case against the social media powerhouse as soon as next week. However, Bloomberg has reported that investigation has been focused mostly on whether the company’s acquisitions of Whatsapp and Instagram harmed competition.
Facebook is the virtual-reality hardware market’s largest player by owning 39% share, according to data from market intelligence firm International Data Corporation. Other players market with smaller shares includes Lenovo Group Ltd., Sony Corp., and HTC Corp. Facebook launched its latest headset, the Quest 2, in October, cutting the price to $299 from $399.
Stan Larroque, the founder, and CEO of Lynx has accused Facebook of selling the latest version of the headset, the Quest 2, at a $50 loss per device, which makes it impossible for smaller device makers to compete.
“The message is we’re Facebook and we don’t care if we make money or not, but we’ll flood the market and virtual reality will be Facebook Reality pretty soon,” Larroque said according to Bloomberg.
Cix Liv, the co-founder of startup Yur Inc., has accused Facebook of eating the market alive; none of the competitors have a chance to breathe freely, with Facebook always going for the kill. Yur Inc. makes technology that can help Oculus games track fitness metrics. Liv had presented the idea to Facebook and claimed that it met all the prerequisites Facebook asked for; however, he was rejected. Furthermore, his company’s apps were completely blocked out, and Facebook later released a new version of Liv’s app in their own way.