Home » US business news » Meta battles FTC in court over virtual reality firm takeover

Meta battles FTC in court over virtual reality firm takeover

By Nithya Bose in US business news, posted December 12, 2022

A federal case has been launched against Facebook owner Meta to stop it from acquiring virtual reality app developer Within.

The FTC sued Mark Zuckerberg's social media giant over the takeover, saying it would “tend to create a monopoly” in the VR fitness app market.

The suit seeks to ask the judge to issue a preliminary injunction that would bar the proposed deal.

FTC lawyer Abby Dennis said the Within deal was part of Meta's effort to gain new and diverse virtual reality users.

It includes users of Within's widely used subscription-based virtual reality fitness app Supernatural.

Ms. Dennis said it would cater to Meta's current virtual reality users, mostly young and male and those keener on gaming.

She said: "Meta could have chosen to use all its vast resources and capabilities to build its own dedicated VR fitness app, and it was planning on doing that before it acquired Within.”

She cited Operation Twinkie, a plan from early 2021 that involved expanding a rhythm game app called Beat Saber into a fitness space.

It is through potential collaboration with digital fitness business Peloton.

She noted an email from CEO Mark Zuckerberg where he said he is "bullish" on fitness and described the proposed deal with Peloton as "awesome."

Lawyers representing Meta and Within claimed the FTC failed to define the relevant market.

They said the firms compete with a range fitness content, not just VR-specific fitness apps.

Meta's lawyers also denied plans for the company's own VR fitness app had gone beyond "brainstorming."

They claimed the FTC underrated the market competition it had defined, citing the possibility for tech giants like Google, Apple, and Bytedance to take advantage.

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The trial is scheduled through December 20.

It will be a test of the FTC's effort to forestall the tech giant’s repeated acquisitions of nascent would-be competitors and effectively buy its way to monopoly.

In a separate 2020 suit, the FTC is attempting to make Meta unwind its two kep takeovers, Instagram and WhatsApp.

Both were in relatively new markets at the time of the acquisition.

Source: Reuters

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