The Federal Trade Commission is attempting to block Meta from acquiring a popular virtual reality app developer, a notable intervention by the agency now led by liberal Big Tech critic Lina Khan.
The FTC announced on Wednesday that it is attempting to block Meta from acquiring Within Unlimited, a virtual reality app developer best known for its VR fitness app Supernatural on the Meta-owned Oculus Quest.
“Instead of competing on the merits, Meta is trying to buy its way to the top,” FTC Bureau of Competition Deputy Director John Newman said in a press statement. “Meta already owns a best-selling virtual reality fitness app, and it had the capabilities to compete even more closely with Within’s popular Supernatural app. But Meta chose to buy market position instead of earning it on the merits. This is an illegal acquisition, and we will pursue all appropriate relief.”
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The commission voted 3-2 to authorize panel staff to seek a temporary restraining order on Meta’s acquisition of Within and has filed a federal court complaint in the U.S. District Court for the Northern District of California to halt the purchase.
The FTC alleges that Meta and its founder, Mark Zuckerberg, are attempting to expand their control of the VR marketplace by acquiring a company that produces fitness software for the Oculus Quest rather than creating their own fitness product. It also alleges that Meta’s decision to acquire Within has influenced the “virtual reality dedicated fitness app market” and diminished the odds of others competing with Meta in the marketplace.
The commission also argued that Meta’s acquisition of Within was illegal because it owned Beat Saber, a similar VR app with which users engage in fitness-esque conduct while swinging controllers in sync with the music.
Meta quickly pushed back on the FTC’s decision. “The FTC’s case is based on ideology and speculation, not evidence,” a Meta spokesperson said in a statement. “The idea that this acquisition would lead to anticompetitive outcomes in a dynamic space with as much entry and growth as online and connected fitness is simply not credible. By attacking this deal in a 3-2 vote, the FTC is sending a chilling message to anyone who wishes to innovate in VR. We are confident that our acquisition of Within will be good for people, developers, and the VR space.”
The FTC filed a suit against Facebook in December 2020, alleging that the company had achieved dominance in the social media marketplace through a “years-long course of anticompetitive conduct.” The agency specifically pointed out the company’s acquisition of Instagram in 2012 and WhatsApp in 2014 as evidence of this conduct. The lawsuit is ongoing.
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Antitrust advocacy organizations praised the FTC’s decision. “With its newly released lawsuit, the FTC’s majority is ensuring Facebook earns, rather than buys, its place in the emerging virtual and augmented reality sector,” Krista Brown, senior policy analyst at the American Economic Liberties Project, said in a press statement. “This is the agency’s first challenge to a big tech merger, and it represents its new commitment to protecting fair competition in nascent digital markets. The effects of Facebook’s pending acquisition of Within, which are laid out in the newly released complaint, would reduce innovation and competition in a sector just getting off the ground.”
Meta announced in October 2021 that it was acquiring Within with the hope of expanding its virtual reality experiences. The acquisition occurred less than a day after the Big Tech company announced that it was changing its name from Facebook to Meta to reflect its focus on the metaverse.
