FTC Seeks to Block Meta Virtual Reality Acquisition

The Federal Trade Commission (FTC) filed suit Wednesday against Meta, Facebook’s parent company, and Mark Zuckerberg to block the acquisition of virtual reality company Within Unlimited. The lawsuit alleges that the acquisition will weaken competition, thus violating antitrust laws.

The FTC seeks to stop the acquisition under Section 13(b) of the Federal Trade Commission Act, 15 U.S.C. § 53(b), which allows it to seek a preliminary injunction to issue an administrative complaint and adjudicate the legality of actions that it believes may violate a law that it enforces. The FTC believes that Meta’s acquisition of Within, the creator of the popular fitness app Supernatural, would substantially lessen competition in the virtual reality fitness app market. The FTC alleges Meta’s choice to buy a potential competitor instead of developing its own virtual reality app could lead to “less innovation, lower quality, higher prices, less incentive to attract and keep employees, and less consumer choice.”

The lawsuit references multiple virtual reality acquisitions by Meta, including its 2014 acquisition of Oculus VR, noting that Meta has become a “key player in each level of the VR ecosystem: in hardware with its Meta Quest 2 headset, in app distribution with the Quest Store, and in apps with Beat Saber and several other popular titles.”

According to FTC Bureau of Competition Deputy Director John Newman, “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.”

Additional Reading

FTC sues Meta to block acquisition of VR company, The Hill (July 27, 2022)
FTC Seeks to Block Virtual Reality Giant Meta’s Acquisition of Popular App Creator Within, Federal Trade Commission (July 27, 2022)
F.T.C. Sues to Block Meta’s Virtual Reality Deal as It Confronts Big Tech, The New York Times (July 27, 2022)
FTC v. Meta Complaint (July 27, 2022)

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