FTC Sues To Block Meta’s Virtual Reality Deal

The Federal Trade Commission on Wednesday filed for an injunction to block Meta, the company formerly known as Facebook, from buying a virtual reality company called Within, limiting the company’s push into the so-called metaverse and signaling a shift in how the agency is approaching tech deals.

The antitrust lawsuit is the first to be filed under Lina Khan, the commission’s chair and a leading progressive critic of corporate concentration, against one of the tech giants. Ms. Khan has argued that regulators must stop violations of competition and consumer protection laws when it comes to the bleeding edge of technology, including virtual and augmented reality, and not just in areas of business where companies have already become behemoths.

“Meta in recent years has set its sights on building, and ultimately controlling, a VR ‘metaverse,’” the FTC’s complaint says. It alleges that Meta saw fitness as a “killer app” market that would help it dominate the nascent VR medium, and Within threatened the dominance of its own similar app, Beat Saber, which it had acquired by buying a different studio in 2019. “Letting Meta acquire Supernatural would combine the makers of two of the most significant VR fitness apps, thereby eliminating beneficial rivalry between Meta’s Beat Saber app and Within’s Supernatural app,” says the complaint.

The complaint lists numerous moves Meta has made to acquire VR studios and cement its dominance in VR. The company has “become a key player at 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,” it says.

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