Mark Zuckerberg just took the witness stand in a trial over the future of virtual reality - Fortune

At contented is whether Meta’s acquisition of the tiny institution that makes a VR fittingness app called Supernatural volition wounded contention successful the emerging virtual world market. If the woody is allowed to spell through, the Federal Trade Commission argues, it would interruption antitrust laws and dampen innovation, hurting consumers who whitethorn look higher prices and less options extracurricular platforms controlled by Meta Platforms Inc.

Meta, meanwhile, wants to poke holes successful the FTC’s statement that determination adjacent exists a chiseled marketplace for what the FTC calls “VR dedicated fittingness apps.”

During his testimony, Zuckerberg seemed to play down the conception that fittingness is simply a distinct, apical class successful VR. He said, portion fittingness is 1 “use case” for virtual reality, different uses — namely games, connection and socializing and enactment — person been the superior ones that Meta has been focusing on.

“While we focused connected a fig of usage cases,” Zuckerberg said, determination was a communal bid of popularity — with games, societal and enactment arsenic the apical 3 and “sort of a longer tail” of different uses for VR that includes fitness.

Whether oregon not VR fittingness apps are a chiseled marketplace is cardinal successful the lawsuit due to the fact that the FTC is arguing that Meta’s introduction into this abstraction done the Within acquisition would stifle competition. If there’s nary defined market, it becomes much hard to beryllium that case.

The FTC, however, argues that not lone is Meta a imaginable entrant into this market, but that it had the resources and quality to make its ain VR fittingness app alternatively of acquiring the apical autarkic subordinate successful the market.

FTC lawyer Abby Dennis pointed retired that successful Facebook’s aboriginal days, the institution Zuckerberg founded successful his Harvard dorm country rejected acquisition offers from a big of large tech companies — including Google, Yahoo and Microsoft.

“You would hold with maine that Facebook continued to successfully innovate adjacent though it ne'er got acquired?” she asked Zuckerberg, who replied affirmatively.

And “the crushed wherefore Facebook has been capable to win for 20 years is due to the fact that it continues to innovate adjacent though it ne'er got acquired?” she continued, and Zuckerberg responded, “Yes.”

But the Meta CEO aboriginal testified that adjacent though his institution was “looking at” processing its ain VR fittingness app earlier deciding to get Within Unlimited successful 2021, the concern situation has changed and “there is astir nary chance” it would commencement specified a task today.

Meta, similar different companies reliant connected online advertizing for revenue, saw a large concern boost during the pandemic lockdown erstwhile radical were staying location glued to their phones and computers. But that didn’t last. Online advertisement spending is connected the decline, competition, notably from rival TikTok, is growing, and Meta recently laid disconnected 13% of its workforce.

Given the existent concern and economical environment, Zuckerberg said that if Meta had started a task to physique a VR fittingness app and “it didn’t person immoderate traction,” it would person apt canceled it.

The case, expected to wrapper up Tuesday, is being heard by U.S. District Judge Edward Davila, who besides oversaw the proceedings of disgraced Theranos laminitis Elizabeth Holmes and her spouse Ramesh “Sunny” Balwani. Both were sentenced to implicit a decennary successful situation for their roles successful the company’s blood-testing hoax.