The Federal Trade Commission on Wednesday (July 27) announced it will push to block social media giant Meta Platforms’ acquisition of Within Unlimited and its virtual reality (VR) fitness app Supernatural, according to a commission press release.
Meta’s VR empire includes a top-selling device, app store and seven of the top developers in the space, the release said.
“Instead of competing on the merits, Meta is trying to buy its way to the top,” said 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.”
Meta is the largest provider of VR devices, according to the release, and also a leading provider of apps in the U.S. The FTC alleged that the company “began its campaign to conquer virtual reality with the acquisition of headset manufacturer Oculus VR, Inc.”
The release also noted that Meta founder and CEO Mark Zuckerberg previously said it was “critical for the company to also be ‘completely ubiquitous in killer apps,’ which are apps that prove the value of the underlying technology.”
In a company blog post responding to the accusations, Nikhil Shanbhag, vice president and associate general counsel, competition and regulatory at Meta, wrote that the case is “based on ideology and speculation, not evidence” and alleged that the FTC is “wrong on the facts and the law.”
“The FTC must prove that our deal violates the law and that people and competition will be harmed,” Shanbhag wrote. “We don’t believe their case can withstand the required scrutiny.”
Zuckerberg told The Verge this week that Meta and Apple are in a “very deep, philosophical competition” to build the metaverse.
Meta is planning to position itself as the less expensive and more open version of whatever Apple is offering, according to the report. Apple is expected to announce the release of its first AR headset before the end of 2022.
Zuckerberg told employees earlier in July that Meta and Apple were competing to figure out “what direction the internet should go in,” The Verge reported, citing a recording of Zuckerberg’s comments during an internal all-hands meeting at Meta.