The Federal Trade Commission has filed an antitrust lawsuit against Meta seeking to prevent it from buying Within Unlimited, the maker of the virtual reality workout app Supernatural. The agency accused the company and its CEO Mark Zuckerberg to “plan to expand Meta’s virtual reality empire with this attempt to illegally acquire a dedicated fitness app that proves the value of virtual reality to users.”
The FTC claimed that Meta is “already a key player” at all levels of the VR ecosystem. He said the company has the best-selling VR device (Meta Quest 2), a leading VR app store, “seven of the most successful developers and one of the best-selling apps of all time. “. The latter probably refers to beat the saber. Meta bought the maker of this rhythm game, Beat Games, in 2019.
“Instead of competing on the merits, Meta is trying to buy its way to the top,” John Newman, deputy director of the FTC’s Competition Bureau, said in a statement. “Meta already has a best-selling virtual reality fitness app and it had the capabilities to compete even more closely with Within’s popular app. Supernatural application. But Meta chose to buy a position on the market instead of earning it on the bottom. This is an illegal acquisition and we will pursue all appropriate remedies.
Meta announced its intention to buy Within last October. It was reported in December that the FTC was reviewing the $400 million deal. Meta, of course, entered the VR market when it bought Oculus in 2014.
The FTC claimed in the complaint that Meta has the resources and “reasonable likelihood” to enter the VR fitness market by building its own app. This approach, according to the agency, would “increase consumer choice, increase innovation, spur competition to attract the best employees, and provide other competitive advantages.” Instead, if it were to buy Within, the FTC asserts that Meta would limit “future innovation and competitive rivalry” and states “that lessening competition violates antitrust laws.”
“The FTC’s case is based on ideology and speculation, not evidence. The idea that this acquisition would lead to anti-competitive results in a dynamic space with as much entry and growth as online and connected fitness is simply not credible,” a spokesperson for Meta told Engadget in “By attacking this agreement in a 3-2 vote, the FTC sends a chilling message to anyone interested in VR innovation,” a statement said. We are confident that our acquisition of Within will benefit people, developers and the VR space.
This decision will be another blow to Meta’s goal of becoming the main player in the metaverse. The company has poured billions into the effort, though in recent months it has scaled back some of its ambitions by cutting costs and seemingly dropping plans for some devices that are supposed to connect to its metaverse. This week, the company announced that it will increase the price of a Meta Quest 2 headset by $100 starting August 1. The news of the FTC’s decision to block the acquisition of Within comes the same day that Meta will report its results for the second quarter of 2022.
Update 7/27 7:41 PM ET: Meta has since published a blog Publish called “The FTC’s attempt to block Meta’s acquisition of Within is factually and legally wrong.” You can probably guess the company’s stance on the matter from this headline alone.
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