Virtual reality antitrust intervention: FTC blocks Meta acquisition

It might seem a little early for a virtual reality antitrust intervention, in a field which is still a niche interest, but the FTC is taking no chances. It has moved to block Meta’s planned purchase of VR fitness company Within.

The aggressiveness of the move makes it seem likely that Apple will face similar bars on acquiring VR companies to assist its upcoming Apple Headset product…

Facebook parent Meta made its initial move into VR through an acquisition – the 2014 purchase of Oculus. Company founder Mark Zuckerberg is convinced that the metaverse is the future of the internet, and CNN notes that Meta has recently bought other VR companies.

It has made a slew of VR-related acquisitions, including game development platform Unit 2 Games and Beat Games, the developer behind Beat Saber.

However, a planned purchase of a further VR company is being opposed by the FTC.

The Federal Trade Commission on Wednesday moved to block Facebook-parent Meta from acquiring virtual reality company Within, offering the clearest signal yet that the agency could take a tougher stance on Silicon Valley deals involving newer technologies.

In a complaint filed Wednesday in federal court, the FTC said Meta has the resources to build its own VR apps similar to those made by Within, the company behind the virtual fitness program Supernatural. Instead, the FTC claims, Meta (FB) is trying to buy the upstart company, which would “[dampen] future innovation and competitive rivalry.”

Supernatural is one of the most popular VR apps running on Meta’s existing VR headsets.

Meta says it’s ridiculous to apply anti-trust measures in such a nascent market.

The FTC alleged in its complaint that the deal would reduce Meta’s incentive to develop its own competitor to Supernatural, or to add new features to Beat Saber, a Meta-owned VR app that the FTC claimed occupies a similar space as a fitness app. Meta, in a blog post responding to the complaint, said Supernatural is not comparable to Beat Saber and thus the deal poses no competitive harm […]

Meta spokesperson Stephen Peters said in a statement that the FTC’s case is “based on ideology and speculation, not evidence.”

“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,” Peters said in the statement. “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.”

9to5Mac’s Take

I do share Meta’s surprise at virtual reality antitrust action at such an early stage. However, given a history of action only being taken when it’s too late – when one or more companies have already achieved enormous market dominance – it perhaps makes sense to try to act earlier.

One thing seems clear: If Meta is considered too big a tech player to be able to buy potential competitors, the same is likely to be true of Apple – especially given Zuckerberg’s view that the iPhone maker will become the other dominant player in VR.

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Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

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