On December 10, 2020, the FCO initiated an investigation against Facebook for requiring users of its Oculus virtual reality glasses to also have a Facebook account.[1]

According to press reports,[2] Oculus has stopped the rollout of its newest Oculus device, “Quest 2”, as well as the sale of all older models in Germany already in September 2020, noting discussions with German authorities as the reason.

The FCO’s investigates whether linking virtual reality products and Facebook’s social network constitutes an abuse of dominance. Facebook has a dominant position in social media platforms, but also a significant position in virtual reality glasses. It remains to be seen whether the FCO pursues a traditional theory of harm based on the economic effect of tying or rather tries to adopt a theory of harm based on privacy concerns.

The FCO already addressed the use of data acquired by Oculus in its 2019 decision against Facebook, which prohibited Facebook to combine data collected on its social network with data collected through other business areas (e.g., through WhatsApp Inc., Instagram LLC and Oculus products). The FCO based its decision on the novel argument that Facebook’s data collection and processing practices were an exploitative abuse of users because Facebook’s terms and conditions violated data protection law.[3]

The FCO’s 2019 decision is still subject to ongoing court proceedings and Facebook has not complied with it yet. In interim proceedings, the Düsseldorf Court of Appeals (“DCA”) suspended the FCO’s decision in August 2019;[4] the Federal Court of Justice (“FCJ”) reinstated the decision in June 2020 on the FCO’s appeal.[5] Upon a second motion for an interim order by Facebook, the DCA again ordered the suspension of the FCO’s decision on November 20, 2020.[6] It argued that despite the FCJ’s decision (which is not binding in interim proceedings), the legality of the FCO decision was not obvious, and found that the decision’s execution could result in undue and irreparable hardship for Facebook. The FCO appealed the DCA’s decision[7], but Facebook retracted its motion for the interim order in late December 2020, before the FCJ was able to decide.

The first hearing in the main proceedings before the DCA is scheduled for March 2021. It will be very interesting to see where the ongoing conflict between the FCJ and the DCA is heading.

[1]              See the FCO’s Press Release of December 10, 2020, available in English here.

[2]              See Welt, Facebook stoppt Verkauf von Oculus-VR-Brillen in Deutschland, September 3, 2020, only available in German here.

[3]              Facebook (B6-22/16), FCO decision of February 6, 2019, available in English here; the FCO’s Case Summary is available in English here, see also our article in the German Competition Law Newsletter January – February 2019, p. 1 et seq., available here.

[4]              Facebook (VI-Kart 1/19 (V)), DCA decision of August 26, 2019, only available in German here. See also our article in the German Competition Law Newsletter July – August 2019, p. 1 et seq., available here.

[5]              See Facebook (KVR 69/19), FCJ decision of June 23, 2020, available only in Germanhere. See also Cleary Gottlieb Alert Memorandum of June 29, 2020, available here.

[6]              Facebook II (Kart 13/20 (V)), DCA decision of November 30, 2020, available only in German here.

[7]              See Facebook II (KVZ 90/20), FCJ decision of December 15, 2020, available only in German here.