Key Takeaways:
- The FTC makes an effort to stop Meta from acquiring a popular app developer.
- Agency alleges that Mark Zuckerberg, the CEO of Meta, is attempting to use the illegal acquisition to grow their virtual reality empire.
- According to the lawsuit, Meta has the resources and a good probability of creating virtual reality software that can compete in the market.
Antitrust investigators are becoming increasingly interested in Meta’s strategy of purchasing rivals in emerging areas. The Federal Trade Commission filed a lawsuit to prevent Facebook owner Meta from acquiring Within Unlimited, the firm that creates the virtual reality exercise program Supernatural.
The Federal Trade Commission strives to encourage competition, protect customers, and provide them with information.
The lawsuit’s complaint raises theoretical arguments that claim antitrust rules apply to activities made by a company that isn’t yet a monopolist but is poised to become one. The legal action may be a sign of a shift by the agency toward restricting takeovers by powerful companies in marketplaces for developing technologies.
Meta already has a highly successful virtual reality fitness program, and Newman claimed that this software had the potential to fight even more fiercely with Within’s well-liked Supernatural app. “But Meta opted to purchase market position rather than gaining it via merit. Because of the illegal nature of this transaction, we will seek every available redress.
The lawsuit, according to a representative for Meta, “is based on ideology and supposition, not proof. It is just untrue that this acquisition would result in anticompetitive effects in a vibrant industry with as much entry and growth as online and linked fitness.
As part of a bigger strategy to rule the entire virtual reality business, Meta is attempting to corner the market for virtual reality fitness apps.
The agency’s action, the business spokesman continued, “sends a chilling message to anyone who aspires to innovate in VR,” and Meta is “sure that our acquisition of Within will be beneficial for consumers, developers, and the VR ecosystem.”
According to the FTC, Meta’s virtual reality product segment has been “expanding at breakneck speed,” bringing in $2.3 billion in revenue in 2021, more than doubling what it did the year before.
The FTC is already prosecuting Meta differently for allegedly illegally monopolizing the private social networking industry, and the agency claims that Meta utilized those two acquisitions to eliminate potential rivals in order to further its hegemony.
The FTC said that the planned merger would significantly lessen competition in the market for fitness apps specifically targeted at virtual reality since Meta would have no motivation to create an app to counter Supernatural.
The complaint claims that allowing Meta to buy Supernatural would unite the developers of two of the most prominent VR fitness apps and eliminate any productive competition between Meta’s Beat Saber program and Within’s Supernatural app.
By a 3-2 vote, the Commission approved the staff’s request for a temporary restraining order and preliminary injunction. Christine S. Wilson and Noah Joshua Phillips, both commissioners, abstained. The Northern District of California U.S. District Court has received a federal court case and requested preliminary relief to block the deal.
The vote was not categorized in the FTC press statement, but Republican Commissioner Christine Wilson tweeted that she was one of the two contrarian votes.
