Competition Law and Virtual Land Market Concentration

1. Introduction

Virtual land refers to digitally created parcels, locations, spaces, or environments within virtual worlds, metaverse platforms, blockchain-based worlds, gaming ecosystems, and other persistent digital environments. These parcels may be represented by NFTs or other digital tokens and can be used for construction, advertising, entertainment, commerce, events, gaming, social interaction, or virtual real-estate development.

Competition-law concerns arise when control over virtual land becomes concentrated in:

• one virtual-world operator;
• a small number of metaverse platforms;
• dominant virtual-land marketplaces;
• blockchain infrastructure providers;
• wallet or payment ecosystems;
• virtual-reality hardware and app-store ecosystems;
• major developers or institutional purchasers;
• vertically integrated platforms controlling both land creation and land trading.

There is not yet a substantial body of reported competition judgments dealing specifically with "virtual land" as a defined antitrust market. Therefore, the most useful legal analysis applies established principles from digital platforms, app stores, gaming, VR, mergers, network effects, interoperability and digital ecosystems to virtual land.

2. Meaning of Virtual Land Market Concentration

Virtual land concentration may occur at several levels.

A. Land-ownership concentration

A small number of entities may acquire a substantial percentage of desirable virtual parcels.

For example:

Platform → controls virtual-world infrastructure → owns substantial parcels → leases/sells parcels → operates marketplace.

This can create concerns if scarcity is artificially maintained or rivals cannot obtain comparable locations.

B. Platform concentration

The more important concentration problem may actually be control over the platform on which virtual land exists.

A platform may control:

• creation of land;
• parcel allocation;
• technical standards;
• identity;
• wallets;
• marketplace access;
• advertising;
• payments;
• search and discovery;
• interoperability;
• secondary trading.

Thus, even if thousands of users own individual parcels, the underlying infrastructure can remain highly concentrated.

C. Marketplace concentration

A virtual-land platform may operate the principal marketplace for purchasing and reselling parcels.

Potential concerns include:

• exclusive dealing;
• self-preferencing;
• discriminatory listing rules;
• excessive transaction fees;
• restrictions on competing marketplaces;
• refusal to provide API access;
• restrictions on external wallets;
• anti-steering provisions;
• tying land transactions to platform payment services.

D. Geographic or positional concentration

Virtual land differs from ordinary digital goods because location can have economic value.

For example:

• parcels next to a major virtual stadium;
• parcels surrounding a popular entertainment district;
• locations near high-traffic portals;
• parcels adjacent to famous brands;
• locations receiving preferential search placement.

A platform controlling strategically important locations may therefore possess a form of positional market power.

3. Relevant Market Definition

A competition authority would normally begin by determining the relevant product and geographic markets.

Possible markets include:

Market 1 — Virtual land itself

The relevant product could potentially be:

"Virtual land parcels within a particular persistent virtual world."

The question would be whether users can switch to another virtual world without losing substantial value.

Market 2 — Virtual-world services

A broader market could include:

• metaverse environments;
• virtual social platforms;
• gaming worlds;
• immersive digital environments.

Market 3 — Virtual-land marketplaces

The market could instead concern:

services facilitating primary or secondary trading of virtual land.

Market 4 — Infrastructure

A particularly important market could involve:

• VR operating systems;
• cloud infrastructure;
• blockchain infrastructure;
• wallets;
• identity systems;
• payment systems.

The appropriate market will depend upon substitutability, switching costs, network effects, interoperability and consumer behaviour.

4. Network Effects and Virtual Land

Network effects are particularly important.

The value of a virtual parcel may increase when more users participate in the same virtual world.

For example:

More users → more activity → greater land demand → higher parcel values → more developers → more users.

This feedback loop can create significant barriers to entry.

A new competitor may offer technically superior virtual land but struggle because it lacks:

• users;
• developers;
• creators;
• advertisers;
• brands;
• payment systems;
• social connections;
• digital assets;
• established reputation.

Consequently, a competition authority may examine ecosystem effects rather than merely counting parcels.

5. Barriers to Entry

Virtual-land markets can exhibit several barriers to entry.

Technological barriers

A new entrant may require:

• cloud infrastructure;
• graphics technology;
• VR compatibility;
• blockchain infrastructure;
• security systems;
• payment infrastructure.

Network barriers

An incumbent may already possess millions of users.

Data barriers

The incumbent may possess extensive information concerning:

• user behaviour;
• land demand;
• transactions;
• advertising;
• virtual-property values;
• user preferences.

Switching costs

Users may have invested substantial resources in:

• avatars;
• virtual property;
• social relationships;
• digital assets;
• reputation;
• businesses.

The greater the switching cost, the greater the potential durability of incumbent market power.

6. Vertical Integration

Virtual land raises particularly interesting vertical-integration issues.

A company could simultaneously control:

VR hardware + operating system + virtual world + virtual land + marketplace + payment system + advertising.

This structure could create opportunities to disadvantage rivals.

Potential conduct includes:

• refusing interoperability;
• giving the company's own land preferential visibility;
• restricting competing marketplaces;
• tying land purchases to proprietary payment systems;
• restricting portability;
• imposing discriminatory fees;
• making rival virtual worlds less accessible.

The legal concern is not vertical integration itself. The issue is whether integration is used to foreclose competition or exploit substantial market power.

7. Abuse of Dominance

Where an undertaking possesses substantial market power, competition authorities could examine conduct such as:

Refusal to deal

A dominant virtual-world operator could potentially refuse access to essential technical infrastructure necessary for competing virtual-land businesses.

Discriminatory access

The platform could give its own subsidiaries better:

• API access;
• search ranking;
• advertising;
• transaction terms;
• technical functionality.

Self-preferencing

The platform could rank its own virtual properties above independent landowners or competing marketplaces.

Excessive fees

A dominant marketplace might impose very high transaction commissions.

Tying

The platform could require:

purchase of virtual land + compulsory use of its proprietary wallet/payment system.

Exclusivity

Landowners might be prevented from listing parcels on competing marketplaces.

8. Merger Control

Virtual-land concentration can also arise through mergers.

A major platform could acquire:

• a virtual-world operator;
• a virtual-land marketplace;
• a blockchain infrastructure provider;
• a VR company;
• a major virtual-property developer;
• a digital advertising platform.

The traditional merger question—whether the transaction substantially lessens competition—may need to consider future competition.

A small virtual-world company may appear insignificant by current revenue but could represent a potentially important competitor.

9. Six Important Case Laws

1. FTC v. Meta Platforms, Inc. / Facebook

The FTC's litigation concerning Meta alleges that Facebook maintained market power through a course of conduct involving acquisitions and restrictions affecting potential competitive threats. The litigation has included extensive examination of network effects, platform competition and acquisition of emerging competitors.

Relevance to virtual land

The case is relevant because a virtual-world incumbent could potentially acquire an emerging competitor before that competitor becomes a significant competitive constraint.

The analogy is:

Emerging virtual-world competitor → acquisition by dominant ecosystem → reduction of future competition.

This is particularly important where the acquired business possesses:

• innovative virtual-world technology;
• a growing user community;
• new virtual-property architecture;
• interoperable technology.

2. FTC v. Meta Platforms, Inc. / Within Unlimited

This is one of the closest precedents for virtual-world competition.

The FTC challenged Meta's proposed acquisition of Within Unlimited, a VR company associated with the Supernatural fitness application. The FTC alleged that the acquisition could reduce competition and innovation in developing VR markets.

Relevance

Virtual land may similarly form part of an emerging VR ecosystem.

The case illustrates the importance of examining:

• innovation competition;
• nascent competitors;
• VR ecosystems;
• future competitive constraints;
• acquisitions in rapidly developing digital markets.

Therefore, an acquisition involving a virtual-land platform should not necessarily be assessed only by looking at current revenues.

3. Epic Games, Inc. v. Apple Inc.

The Epic Games litigation concerned Apple's control over the iOS ecosystem, including app distribution and in-app payment restrictions. The Ninth Circuit upheld substantial portions of the district court's judgment, while rejecting Epic's federal antitrust claims.

Relevance

The case demonstrates the importance of ecosystem control.

A virtual-world operator could similarly operate a closed ecosystem in which:

virtual land → marketplace → payment → digital services

are controlled by one platform.

Competition analysis may therefore consider whether restrictions on alternative marketplaces or payment mechanisms unnecessarily limit competition.

4. Epic Games, Inc. v. Google LLC

This case is particularly significant for virtual economies.

The jury found Google liable for antitrust violations concerning Android app distribution and Android in-app billing markets. The Ninth Circuit affirmed the verdict and injunction in 2025.

The case involved Google's control over a platform through which developers reached users and conducted digital transactions.

Relevance to virtual land

A virtual-land marketplace could become a comparable intermediary.

Potentially analogous conduct includes:

• mandatory proprietary payment systems;
• restrictions on alternative marketplaces;
• exclusionary agreements;
• discriminatory distribution;
• tying land transactions to platform services.

The case therefore illustrates how control of digital distribution infrastructure can become competition-law significant.

5. Google Android — Google LLC and Alphabet Inc. v. European Commission

The EU Android litigation examined Google's conduct involving Android, Google Play and related contractual arrangements. The General Court largely upheld the Commission's infringement findings, with modification of the fine.

Relevance

The case demonstrates how competition law can examine bundling, contractual restrictions and ecosystem leverage.

For virtual land, an analogous concern could arise where:

dominant virtual-world infrastructure + marketplace + payment service

are bundled in a manner that disadvantages rival providers.

The important legal principle is that dominance in one digital layer may potentially be leveraged into another related market.

6. FTC v. Microsoft Corp. — Activision Blizzard

The FTC challenged Microsoft's proposed acquisition of Activision Blizzard, emphasizing concerns about Microsoft's ability to control valuable gaming content and potentially disadvantage competing gaming platforms.

Relevance to virtual land

The case illustrates the importance of control over valuable digital content.

Virtual land may similarly become a critical competitive input where a platform controls:

• premium virtual locations;
• major entertainment venues;
• digital infrastructure;
• exclusive experiences;
• important virtual communities.

A merger that combines a dominant virtual platform with an important virtual-property ecosystem could therefore raise foreclosure concerns.

10. Comparative Importance of the Six Cases

11. Essential-Facility Considerations

The essential facilities doctrine may become relevant in exceptional circumstances.

Suppose a virtual-world operator controls infrastructure that is genuinely indispensable to a competing virtual-land business and:

1. the facility is controlled by a dominant undertaking;
2. effective duplication is impracticable;
3. access is necessary for competition;
4. access can technically be provided;
5. refusal substantially harms competition.

A competition authority could investigate whether refusal of access constitutes abusive exclusion.

However, mere importance is not automatically equivalent to an essential facility. Courts generally require demanding conditions before imposing compulsory access.

12. Interoperability and Portability

Interoperability may become one of the most important future competition issues.

Consider a user who owns:

• a virtual house;
• NFT land;
• avatar assets;
• virtual vehicles;
• commercial property.

If these assets work only inside one platform, the platform can impose significant switching costs.

A competing platform might therefore be unable to attract users because:

Users cannot take their virtual property with them.

Competition authorities may consequently examine:

• asset portability;
• identity portability;
• wallet interoperability;
• API access;
• cross-platform functionality;
• technical standards.

13. Artificial Scarcity

Virtual land is unusual because scarcity can be technologically created.

A platform might establish:

maximum number of parcels = 100,000.

Scarcity itself is not necessarily anticompetitive.

But competition questions could arise if a dominant undertaking deliberately manipulates scarcity to:

• exclude competitors;
• increase switching costs;
• restrict access to rival developers;
• favour affiliated businesses;
• manipulate marketplace liquidity.

The relevant question would be whether the conduct constitutes legitimate product design or exclusionary exploitation of market power.

14. Predatory or Exclusionary Pricing

A dominant virtual-land marketplace might temporarily charge:

• zero marketplace fees;
• below-cost transaction fees;
• subsidised land prices;
• free development tools.

This could attract users and drive smaller competing marketplaces out of the market.

The competition inquiry would need to distinguish:

legitimate innovation/subsidisation

from

strategic exclusion designed to eliminate competitors and subsequently exploit market power.

15. Self-Preferencing

A particularly important hypothetical is:

Platform owns virtual land + operates marketplace + controls search algorithm.

It could potentially rank:

Platform-owned parcels

above:

independent parcels.

This could affect competition where users depend heavily on platform search and discovery.

The investigation would focus on:

• algorithmic ranking;
• transparency;
• discrimination;
• internal versus external sellers;
• effects on rival marketplaces;
• objective justifications.

16. Data Advantages

Virtual-land platforms can accumulate highly valuable data:

• parcel prices;
• transaction histories;
• user movement;
• user engagement;
• advertising behaviour;
• development activity;
• land demand;
• geographic preferences.

A dominant platform could potentially use this information to identify successful competitors and copy or acquire them.

Competition analysis may therefore involve the relationship between:

data concentration → market power → entry barriers → competitive foreclosure.

17. Cross-Market Leverage

Virtual land may interact with several markets simultaneously.

For example:

VR headset
↓
Operating system
↓
Virtual world
↓
Virtual land
↓
Marketplace
↓
Payment system
↓
Advertising

A company controlling multiple levels could potentially leverage market power from one market into another.

This makes traditional single-market analysis more difficult.

18. Consumer Welfare and Innovation

Competition authorities would generally consider effects such as:

Consumers

• higher transaction fees;
• reduced choice;
• poorer interoperability;
• reduced privacy;
• higher virtual-property costs.

Developers

• marketplace commissions;
• discriminatory access;
• technical restrictions;
• exclusion from discovery.

Competitors

• barriers to entry;
• inability to access users;
• inability to interoperate;
• exclusion from important virtual locations.

Innovation

• reduced experimentation;
• fewer competing virtual worlds;
• reduced development of interoperable standards;
• diminished incentives for new virtual-reality technologies.

19. Possible Competition-Law Remedies

Where an infringement is established, possible remedies could include:

Structural remedies

• divestiture;
• separation of marketplace and platform functions;
• restrictions on acquisitions.

Behavioural remedies

• non-discriminatory access;
• interoperability obligations;
• API access;
• prohibition of self-preferencing;
• prohibition of exclusive dealing;
• alternative-payment access;
• data-access safeguards.

Merger remedies

• licensing commitments;
• interoperability commitments;
• access obligations;
• restrictions on exclusivity.

The appropriate remedy would depend on the specific competitive harm established.

20. Competition-Law Risk Matrix

21. Conclusion

Virtual land market concentration should not be analysed merely by counting who owns the most digital parcels. The more significant competition-law question may be who controls the ecosystem through which virtual land is created, accessed, traded, displayed, financed and used.

The most important analytical factors are:

1. market definition;
2. platform market power;
3. network effects;
4. control over scarce virtual locations;
5. vertical integration;
6. marketplace control;
7. interoperability;
8. switching costs;
9. data advantages;
10. nascent-competitor acquisitions;
11. self-preferencing;
12. exclusionary agreements; and
13. control over complementary infrastructure.

The Meta/Within litigation is particularly instructive because it directly concerns competition in a VR market, while Epic v. Apple, Epic v. Google, Google Android, Meta/Facebook and Microsoft/Activision provide broader principles for analysing digital ecosystems, platform control, vertical integration, mergers and access restrictions.

Accordingly, future competition-law disputes involving virtual land are likely to move beyond the question "Who owns the land?" toward the more fundamental question:

"Who controls the digital infrastructure, users, marketplaces, data and interoperability that make virtual land economically valuable?"