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Facebook mother Meta strikes back in battle with FTC over VR company takeover

In a landmark legal challenge to a Big Tech merger, the Federal Trade Commission is suing to block the deal.

Federal regulators and Facebook mom Meta are fighting over Meta’s proposed acquisition of virtual reality company Within Unlimited and its fitness app Supernatural.

In a landmark legal challenge to a Big Tech merger, the Federal Trade Commission is suing to block the deal because it would hurt competition and violate antitrust laws.

Meta hit back on Thursday, asking a federal court in San Jose, California, to overrule the FTC’s July request for provisional provision against the takeover.

The tech giant said in its lawsuit that the government has not found that the virtual reality market is concentrated with high barriers to entry. The claims in the agency’s lawsuit “are nothing more than the FTC’s speculation about what Meta might have done,” the company says. It argues that the FTC failed to meet two key legal standards set in previous cases.

In a statement on Thursday, the FTC noted that it revised its complaint last week in a way that narrowed the focus of its allegations. In its new form, the statement read: “We are confident that the court’s complaint will not be dismissed and this case will be heard.”

Meta said in his own statement, “The FTC’s attempt to resolve its ill-considered complaint still ignores the facts and the law and relies on pure speculation of a hypothetical future state.”

It added that it believes the complaint should be dismissed as there is “vibrant competition in the gym and beyond (virtual reality), and our acquisition of Within will be good for people, developers and the VR space.”

The FTC’s vote last summer to try to block Within’s takeover was 3-2, with Chairman Lina Khan and the other two Democratic commissioners approving and the two Republicans against.

In the original FTC indictment, CEO Mark Zuckerberg was named as the defendant as well as Meta, but he was dropped in August.

Led by Zuckerberg, Meta began a campaign to conquer virtual reality in 2014 with the acquisition of headset maker Oculus VR. Since then, Meta’s VR headsets have become the cornerstone of its growth in the virtual reality space, the FTC noted in its suit. Fueled by the popularity of its best-selling Quest headsets, Meta’s Quest Store has become a leading US app platform with over 400 apps available for download, according to the agency.

Meta bought seven of the most successful virtual reality development studios and now has one of the largest virtual reality content catalogs in the world, the FTC says. The acquisition of the Beat Games studio gave Meta control of the popular Beat Saber app.

In its lawsuit against the Within acquisition, the FTC cited a 2015 email from Zuckerberg to key Facebook executives stating that his vision for “the next wave of computing” was control over apps, as well as the platform on which those apps are built. distributed. The email says a key part of this strategy is that the company is “completely ubiquitous in killer apps,” apps that prove the technology’s value.

Zuckerberg announced ambitious plans a year ago to build the “metaverse” — a virtual reality construct intended to supplant the internet, merge virtual life with real life and create endless new playgrounds for everyone.

On Tuesday, the company, based in Menlo Park, California, unveiled a $1,500 virtual reality headset in hopes that people will soon be using it to work and play in the metaverse.

The move marked another FTC salvo against Meta — the owner of Instagram, Messenger and WhatsApp alongside Facebook — in the agency’s fight against what it deems anticompetitive behavior in the tech industry.

the FTC filed an antitrust lawsuit against Facebook the end of 2020. With that action, the agency is looking for remedies, such as a forced spin-off of Instagram and WhatsApp, or a restructuring of the company.

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