Officials from the European Union’s antitrust authority said metaverse companies could limit users’ choice and raise prices if they grow to dominate the market. CoinDesk Regulatory Reporter Jack Schickler explains why the officials worry that tech giants like Meta could choke metaverse competition.
The EU is preparing its own strategy for virtual online worlds in which people can interact, socialize or trade via avatars – and the metaverse could be the latest front in a long-running antitrust campaign against tech giants that threaten consumer welfare.
With Facebook renaming itself Meta Platforms (META) as it seeks to reorient itself around the technology, policymakers are worried the company may seek to create a “walled garden” that users can’t easily leave.
A big company that forms a closed ecosystem “may constrain its consumers, business partners and competitors in numerous ways,” forcing them to buy products from that company, charging exorbitant prices or misusing people’s personal information, said Friedrich Wenzel Bulst and Sophie De Vinck of the European Commission’s antitrust unit. The European Commission is the EU’s governing body.
The EU has long complained about anticompetitive behavior by tech giants. Last month, it imposed a fine worth over 4 billion euros ($4 billion) on Google for how the company authorized phones running the Android operating system. And in May, it passed legislation called the Digital Markets Act, which could see companies such as Apple (AAPL) and Amazon (AMZN) fined 20% of their annual revenue.
“There are good reasons for competition law enforcers on both sides of the Atlantic to be actively accompanying technological and market evolutions in this area” to keep the metaverse innovative and open, said Bulst and De Vinck, who both work on the media sector unit of the commission’s antitrust division. They called for more discussions with the Department of Justice and Federal Trade Commission in the US on the issue.