Image Source: Game Developer
The Federal Trade Commission took action on Wednesday to prevent Facebook-parent Meta from buying virtual reality startup Within, sending the strongest message yet that the organization would adopt a harder stance on Silicon Valley acquisitions involving cutting-edge technologies.
The FTC said in an injunction filed on Wednesday that Meta had the capabilities to create its own VR applications similar to those created by Within, the firm behind the virtual fitness program Supernatural. Instead, the FTC asserts, Meta (FB) is attempting to acquire the fledgling business, which would “[dampen] future innovation and competitive rivalry.”
The internet giant was charged with illegally aiming to grow its “virtual reality empire” by the FTC, which is in charge of enforcing US antitrust rules.
The business Meta has staked its future on virtual and augmented reality technology, and the injunction comes as it works to develop use cases for its VR headsets. One of the most downloaded apps for Meta’s headgear is Supernatural, which in some cases, introduces consumers to the concept of exercising in virtual reality for the first time.
According to Meta’s representative Stephen Peters, the FTC’s argument is “based on ideology and assumption, not proof.”
With its long-standing acquisitions of Instagram and WhatsApp at the crux of the case, Meta is defending itself against yet another antitrust complaint from the FTC that aims to disband the internet behemoth. The FTC’s move also comes as legislators debate measures that may limit the influence of dominant big digital companies like Meta.
When it purchased VR gear manufacturer Oculus in 2014, Meta, then known as Facebook, made its VR debut. It has recently acquired a number of VR-related companies, including game development platform Unit 2 Games and Beat Games, the company behind the well-known game Beat Saber. In October 2021, Meta revealed its intention to purchase Within for an unknown fee.
Supernatural was made available in April 2020 by Within, a six-year-old maker of VR apps. It costs $19 per month or $180 per year for customers to continue exercising in virtual reality, unlike some other VR apps that demand a one-time payment.
FTC claims Meta is in breach of trust
The FTC asserts in its complaint that Meta already has influence over “the top-selling device, a major app store, seven of the most successful developers, and one of the best-selling apps of all time” in the VR industry. In addition, the outlet cited a widely circulated email that Zuckerberg allegedly sent to Meta executives, in which he is quoted as saying that the business must be “absolutely ubiquitous in killer apps,” which refers to applications that will demonstrate the true worth of new technologies.
According to Charlotte Slaiman, competition policy director at the consumer group Public Knowledge and a former FTC antitrust official, the FTC’s core point in the complaint—that the acquisition will diminish competition by eradicating a competitor—reflects decades of accepted antitrust thought.
According to Slaiman, the case expressly acknowledges Meta’s potential to rule the virtual reality industry. It’s quite encouraging to see that the FTC is not “waiting to see what happens” with VR.
Slaiman added that the timing of the FTC complaint could increase pressure on Congress to approve a tech-focused antitrust measure that creates new barriers between internet firms’ many lines of business.
The Senate is set to vote on the American Innovation and Choice Online Act, but since Senate Majority Leader Chuck Schumer has not placed it on the schedule, time is running out before Congress adjourns for the summer.