Meta aims to turn German XR consumers against regulators
Bundeskartellamt spokesperson Kay Weidner says that the proceedings launched in December 2020 regarding a possible antitrust violation on the part of Meta relate to the linking of Meta’s VR offering (Oculus Quest, Quest 2) with the Facebook social network.
“In these proceedings, the German Federal Cartel Office has not yet made a decision or given Meta any specific legal requirements,” Weidner said.
The sales strategy for Germany to date is based solely on Meta’s decision, he said. He said it is to be welcomed that Meta is making it possible to use VR products without a Facebook account via the recently introduced Meta account.
“We are in talks with the company about the specific modalities of this registration process,” Weidner says.
Meta still does not sell Quest VR headsets in Germany, the exact reason is unknown. But Meta “has a plan,” according to Chief Technical Officer Andrew Bosworth – and the enthusiasm of German consumers apparently plays a role.
Meta and the German Federal Cartel Office have been at loggerheads since February 2019 (Chronicle). Initially, the main issue was the Facebook account requirement introduced with Quest 2 and thus the linking of products that have no direct connection but contribute to a dominant position. The concrete point of criticism was the merging of different data streams.
Meta vs. German Federal Cartel Office, round two
But in the meantime, there seems to be more to it than that: Meta switched to Meta Accounts in the summer, which eliminates the Facebook account requirement. Nevertheless, the Quest devices will still not be sold in Germany. This will be the case until Meta decides otherwise – it also applies to the upcoming Quest Pro.
Why then does Meta continue to refrain from selling Quest headsets in Germany? There is possibly a connection with an announcement made by the German Federal Cartel Office in January 2021, according to which the new Section 19a of the GWB Digitalisation Act is to be applied for the first time in the proceedings against Meta. The paragraph is intended to enable the Federal Cartel Office to intervene at an early stage if competition is threatened by certain large technology companies.
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This threat could be seen by the German Federal Cartel Office as going beyond the Facebook account obligation, for example because Meta massively subsidizes the Quest devices from its advertising business, which also displeases the U.S. antitrust authority FTC, or because VR collects a lot of movement and body data even without the Facebook account obligation, thus creating a new data class.
Andreas Mundt, President of the German Federal Cartel Office, said at the time: “In future we will be able to prohibit big tech companies from engaging in certain types of conduct much earlier and, so to speak, shut the stable door before the horse has bolted. We will be allowed to take preventive measures which can contribute decisively to curbing the market power of the large digital platforms. The German lawmaker has assumed an international pioneer role in this area as the legislative process at the European level, where similar tools are being discussed, is still in its initial stages.”
Neither Meta nor the German Federal Cartel Office have commented on the specific issue in dispute in the past. The Federal Cartel Office points out that Meta is voluntarily waiving the sale. And the fact that Meta continues to waive the sale shows that it apparently does not agree with the plans of the Federal Cartel Office.
Meta runs XR ads in Germany despite sales stop
Nevertheless, Meta has recently started running TV ads for the Metaverse in Germany and is once again hosting events for the German press. At a current event, German journalists can try out the Meta Quest 2 VR headset. Why is this event taking place – is there an imminent market launch in Germany?
Recent statements from Meta CTO Andrew Bosworth suggest a different strategy: Meta wants to get German consumers excited about its XR products despite the sales stop, so they will express their interest to regulators.
Bosworth says as much openly in an Instagram post in response to a question about whether Meta’s XR headsets would be sold in Germany after the Facebook account requirement was lifted: It wouldn’t hurt if people in Germany “express their enthusiasm” for the launch of Quest headsets in Germany “to local regulators,” Bosworth says. He added, “We have a plan.”
Germany is an important market globally and in Europe, where Meta is eager to offer its headsets, Bosworth says.