FTC Sues to Block Meta from Buying VR Company

The Federal Trade Commission (FTC) filed a complaint on July 27 to block Meta from acquiring virtual reality (VR) company Within, accusing Meta of illegally attempting to expand its “virtual reality empire.”

Filed in federal court, the complaint alleged that Meta’s proposed acquisition of Within, the company behind popular virtual reality fitness app Supernatural, is “illegal” and would potentially “[dampen] future innovation and competitive rivalry.”

The complaint noted that in a publicly reported email to executives, Meta Chief Executive Mark Zuckerberg said that it was critical for the company to be “completely ubiquitous in killer apps.”

The complaint also noted that according to Within’s co-founder and chief executive, “Fitness is the killer use case for VR.”

“Instead of choosing to compete on the merits through its own VR-dedicated fitness app, Meta has resorted to proposing this unlawful acquisition,” the complaint alleged.

Meta first announced its planned acquisition of Within for an undisclosed sum in October 2021.

In a statement on July 27, Meta said that the FTC’s case was “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,” Nikhil Shanbhag, vice president and associate general counsel of competition and regulatory at Meta, said.

“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,” Shanbhag added.

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