Germany Opens Competition Probe Into Facebook And Oculus

German competition officials have opened an investigation into Facebook over its Oculus virtual reality headsets.

Facebook acquired Oculus in 2014 and previously allowed users to activate the headsets with a stand-alone Oculus login.

But the new Oculus Quest 2, which began shipping in October, requires a Facebook account for new users, something widely criticised by reviewers and fans.

Facebook has also said it plans to gradually phase out existing Oculus accounts.

Emerging market

Germany’s competition authority, the Bundeskartellamt, said the moves could be an abuse of Facebook’s dominant position in social media, affecting both the social media and virtual reality markets.

“We intend to examine whether and to what extent this tying arrangement will affect competition in both areas of activity,” said Bundeskartellamt president Andreas Mundt.

Mundt said that besides being a dominant player in social media in Germany, Facebook is also “an important player in the emerging but growing VR (virtual reality) market”.

The Oculus Quest 2’s relatively low cost has led some to speculate Facebook may be selling it at a loss, which could add to competition concerns.

Facebook stopped selling its first-generation Oculus Quest headsets in Germany in September over regulatory concerns.

Competition

The company is involved in an existing, ongoing dispute with the Bundeskartellamt, after the agency ordered it in 2019 not to combine data sets from different sources without consent.

Facebook lodged an emergency appeal, and a hearing is scheduled for March of next year.

“The fact that Facebook has resorted to various legal remedies is not surprising in view of the significance which our proceedings have for the group’s business model,” Mundt said.

“Nevertheless, the resulting delay in proceedings is of course regrettable for competition and consumers.”

Facebook said it would “cooperate fully” with the agency.

US action

“While Oculus devices are not currently available for sale in Germany, we will cooperate fully with the Bundeskartellamt and are confident we can demonstrate that there is no basis to the investigation,” the company said in a statement.

Earlier this month Bloomberg reported that US Justice Department investigators were talking to Oculus app developers over accusations that Oculus copied apps made by smaller companies and showed preference to its own versions in the Oculus app store.

Last week the US Federal Trade Commission and 48 state and regional attorneys general sued Facebook for alleged abuses of its dominant market position, in a case that focuses on the company’s acquisitions of Instagram and WhatsApp.