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FTC sues to block Meta from acquiring VR competitor

'Instead of competing on the merits, Meta is trying to buy its way to the top'


Jacob Seitz


Posted on Jul 27, 2022   Updated on Jul 27, 2022, 3:00 pm CDT

The Federal Trade Commission (FTC) is attempting to block Meta from acquiring a virtual reality competitor, citing antitrust concerns, according to a press release.

In a complaint filed in the U.S. District Court for the Northern District of California, the FTC alleges that Facebook is trying to buy Within Unlimited, the developer of a virtual reality fitness app, instead of engineering its own version, calling the effort anticompetitive.

The complaint is the one of the biggest antitrust lawsuit filed by FTC Chair Lina Khan, a vocal critic of anti-competitive practices in the tech industry. The complaint is just the latest in a slew of lawsuits and investigations into big tech companies by the Biden administration, signaling a crackdown on big tech companies amid global attempts to rein in the big four’s dominance.

“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 in the release. “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 already purchased seven successful virtual reality development studios and has one of the largest virtual reality content catalogues in the world, the FTC said. Their most recent acquisition of Beat Games gave Meta control over the wildly popular Beat Saber app.

Meta is attempting to purchase Within Unlimited for its fitness app Supernatural, which offers workout experiences set in exotic, hyperrealistic locations, set to music from popular artists like Katy Perry and Coldplay. Users have compared the workout experience to Peloton, with expert coaches and workouts capturing the business of people using in VR fitness.

The complaint alleges that the merger would be anticompetitive, given that Supernatural is a competitor to the Meta-owned Beat Saber. 

“The two companies currently spur each other to keep adding new features and attract more users, competitive rivalry that would be lost if this acquisition were allowed to proceed,” the release said.

In a statement to the Daily Dot, Meta, which is leaning heavily into the future of the metaverse, criticized the FTC.

“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. By attacking this deal in a 3-2 vote, the FTC is sending a chilling message to anyone who wishes to innovate in VR,” a Meta spokesperson said.

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*First Published: Jul 27, 2022, 2:57 pm CDT