The U.S. Federal Trade Commission is taking a legal step to stop Facebook parent Meta from purchasing virtual reality (VR) content maker Within Unlimited.
The move is part of the regulator’s anti-monopoly fight that has intensified against Big Tech recently.
A report by Reuters said the FTC, in a request filed on Wednesday in federal court in San Francisco for a temporary restraining order and preliminary injunction, called Facebook a “global technology behemoth,” noting its ownership of popular apps including Instagram, Messenger and WhatsApp, and said its “campaign to conquer VR” began in 2014 when it acquired Oculus, a VR headset manufacturer.
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Deciding through 3-2 vote, the FTC argued that the acquisition portrays monopoly given Facebook’s influence in the VR market. The social media company’s acquisition of Oculus has already given it a dominant position in the market.
Facebook agreed to buy Within, which has a popular fitness app called “Supernatural”, in October 2021 for an undisclosed sum. Within was founded in 2014 and has since become a big name in creating original content for virtual reality.
The FTC separately had filed an antitrust lawsuit against Facebook in 2020. The Commission has become more proactive since Lina Khan was appointed its chair last year.
The ultimate goal is to limit the freedom of the Big Tech, flexing their financial muscle, from buying every company they see as a competitor.
Meta, Google, Amazon and Microsoft have been subjects of debate in the US Congress in recent times over anti-competition inquiries. Meta’s acquisition of Instagram was a reference point.
The FTC’s lawsuit against Meta denotes the regulator’s stern position on further acquisition by any member of the Big Tech, particularly companies in the same line of business with the tech firms.
Meta said in a statement that it disagreed with the FTC’s analysis of the market.
“The FTC’s case is 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,” the company said.
“We are confident that our acquisition of Within will be good for people, developers, and the VR space,” Meta said.
The FTC has maintained that the acquisition is monopolistic. In its complaint, the Commission argued that the planned acquisition was a way for Meta to dominate virtual reality. VR industry revenues are expected to grow from $5 billion last year to more than $12 billion in 2024, the FTC said in its complaint.
Meta already has the best-selling VR headset, the Quest 2, and controls a Meta Quest Store with hundreds of apps. It has bought game makers like Beat Games, Sanzaru and Ready at Dawn Studios, among others, the complaint said.
“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,” said John Newsman, director of the FTC’s Bureau of Competition, in a statement. “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.”