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Germany Opens Legal Action Against Facebook Account Requirement for Oculus Headsets

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Today, Germany’s Federal Cartel Office (Bundeskartellamt) announced it was initiating formal abuse proceedings against Facebook for its controversial policy of requiring new Oculus device owners to use a Facebook account.

Germany’s Federal Cartel Office, the competent authority when it comes to regulating national competition, today announced that it’s opened an inquest to examine “the linkage between Oculus virtual reality products and the social network and Facebook platform.”

Andreas Mundt, President of the Federal Cartel Office, says that since all new users of Oculus devices must also have a Facebook account, forcibly linking its VR products and its social network “could constitute a prohibited abuse of dominance by Facebook.”

“With its social network Facebook holds a dominant position in Germany and is also already an important player in the emerging but growing VR (virtual reality) market,” said Mundt. “We intend to examine whether and to what extent this tying arrangement will affect competition in both areas of activity.”

Back in September, Facebook halted sales of all Oculus products in Germany. At the time, it wasn’t clear whether it was the Federal Cartel Office or Facebook itself that initiated an anticipatory halt in sales ahead of litigation proceedings.

This isn’t the first time Facebook has found itself in hot water in Germany, Europe’s largest economy. In early 2019, the Federal Cartel Office imposed extensive restrictions on Facebook regarding the processing of user data, and its role in creating so-called ‘super profiles’, which aim to collect and merge user data from its various products. Litigation is still pending in that country, however the next hearing is set for March 26th, 2021 at Düsseldorf’s Higher Regional Court.

Should a similar situation happen regarding Facebook’s VR devices in Germany, it’s very likely customers there won’t be able to directly buy Oculus headsets for some time.

Customers in Germany are currently only capable of purchasing Oculus products from neighboring countries and importing them for personal use.

In the meanwhile, Facebook is also now dealing with United States Federal Trade Commission, which announced yesterday that it had filed a lawsuit with the Washington, D.C. US District Court alleging similar anticompetitive practices, which would constitute an illegal monopoly on “personal social networking.”

A possible outcome of the suit could include spinning out Facebook’s larger social networking properties, Instagram, and WhatsApp. Oculus wasn’t named directly the suit, however, it’s clear the case’s outcome could have wide-ranging repercussions for all of Facebook’s business segments.

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