Facebook paid up to $3 billion to buy Oculus VR in 2014. Now it’s under scrutiny for how it handled competition.
Scott Stein/Bioreports
Oculus VR helped spark the virtual reality industry back to life when it announced its Rift headset in 2012. Then Facebook bought the company in 2014 for up to $3 billion. Now it’s one of the industry’s largest players — and reportedly the target of a Department of Justice probe into anti-competitive behavior.
Mark Zuckerberg’s social networking giant is said to be the center of an investigation by the US Department of Justice’s antitrust division over how it handled its place as one of the industry’s biggest players, according to a Thursday report by Bloomberg. At issue, according to the report, which cited unidentified sources, is that Facebook used its market power and vast resources as the world’s largest social network to push out companies making rival games or services.
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“It’s copying the most promising ideas, using below-cost pricing for its devices and making it harder for some apps to work properly on the platform, according to developers and a hardware maker,” Bloomberg wrote. Spokespeople for the DOJ and Facebook didn’t immediately respond to requests for comment.
The move marks the latest in a series of investigations by legislators and regulators around the world, scrutinizing the company’s behavior as one of the world’s largest companies and the biggest social network on the planet. The US Congress just wrapped up an investigation into the company’s antitrust dealings, with some lawmakers criticizing Facebook’s “copy, acquire, kill” approach to competition. Copy what it can, buy what it can’t and kill off any other competitors along the way.
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Microsoft took a similarly ruthless approach, which helped it become the world’s largest software maker, as well as a monopoly, according to judge overseeing its antitrust trial two decades ago. Facebook’s aggressive methods helped it become the dominant social network, its products used by more than 2.7 billion people at least once a month. That’s one in every three people around the globe and more than half the world’s online population.
The DOJ’s investigation adds to the long list of headaches Zuck & Co. are facing, from combating hate speech on its service, to slowing the spread of disinformation, to responding to inquiries from government officials. But the DOJ’s move could also have wide-reaching implications for Facebook’s Oculus division, which Zuckerberg says is one of the company’s biggest bets about the future of computing.
Amazon, Apple, Facebook and Google have all been targeted by regulators and lawmakers around the world who worry about the companies’ power and influence.
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While Zuckerberg is excited about a future full of virtual worlds we use for education, communication and entertainment, here in the present things aren’t going as well. Virtual reality is still a nascent and somewhat struggling industry, expected to notch about $6.7 billion in sales this year. It’s growing, but that’s a rounding error when compared to the much more widely used phone and tablet markets.
Additionally, there aren’t many companies selling virtual reality headsets to the public in large numbers these days. There’s HTC, which makes the $699 Vive headset; game maker Valve, which sells the $499 Index; and Sony, with its $299 PlayStation VR.
Facebook sells the $299 Oculus Quest 2, which is considered one of the best headsets on the market. “This year it’s already been my portable holodeck, my little magic fitness room, my escape space,” wrote Bioreports’s Scott Stein in his review of the device. Bioreports also named it an editor’s choice.
