A report and recommendations prepared by a U.S. House of Representatives subcommittee on antitrust law suggests Facebook may be anticompetitive with its Oculus Quest 2 account requirement. The report suggests that Congress should clarify that “conditioning access to a product or service in which a firm has market power to the use of a separate product or service is anticompetitive.”
The 449-page report prepared by staff for the investigation of competition in digital markets looks at Amazon, Apple, Facebook, and Google, with an appendix included that lists the major acquisitions and mergers of each company. Among them is Oculus VR, the 2014 Facebook acquisition which grew into Facebook Reality Labs and which will, next week, ship the Oculus Quest 2 standalone headset for $299. That price may be unmatchable by competitors. And the kicker? Quest 2 will be the first new headset from Facebook to require a Facebook account from the get-go.
“Facebook has also maintained and expanded its dominance through a series of acquisitions of companies it viewed as competitive threats, and selectively excluded competitors from using its platform to insulate itself from competitive pressure,” the report states. “Facebook has also maintained its monopoly through a series of anticompetitive business practices. The company used its data advantage to create superior market intelligence to identify nascent competitive threats and then acquire, copy, or kill these firms. Once dominant, Facebook selectively enforced its platform policies based on whether it perceived other companies as competitive threats. In doing so, it advantaged its own services while weakening other firms.”
The report only mentions virtual reality a limited number of times, focusing more on Facebook’s “monopoly power in the market for social networking.” However, the language above seems to apply to Facebook’s recently announced requirement attaching Oculus Quest 2 ownership to the use of a Facebook account.
The document is lot to take in but we’d recommend giving it a read if you have time. It offers significant new context for some of the ongoing conversations we’re having with developers like those behind SideQuest, Virtual Desktop and Bigscreen. Each of those services bump up against Facebook’s policies toward VR developers in different ways. I’ve embedded recent discussions we’ve had with those developers in our virtual studio.
The conversation regarding market dominance in VR is ongoing and we’re covering it on an ongoing basis. We’ve asked Facebook for comment on this topic and will update if we hear back. In the meantime, let us know in the comments below if you find anything else interesting in the report!