FTC Sues Meta to Prevent it from Using Acquisitions to Expand its ‘Virtual Reality Empire”

The hits just keep on coming for Meta, it seems. We don’t have room to rehash all the setbacks it’s faced recently, but now we can add one more to the list: a new FTC lawsuit. This newest suit isn’t about jeopardizing the mental health of its customers though. This one has to do with its recent attempt to purchase a company that makes Virtual Reality (VR) games. In October of last year Meta announced it was buying Within, which makes several popular VR titles. One of those is a workout app named Supernatural. It appears to be a “Beat Saber-esque” workout game. This week the FTC filed suit to stop the acquisition. The FTC says the buyout equates to an “illegal acquisition to expand [its] virtual reality empire.”

The FTC’s logic is pretty straightforward. Meta already controls almost every aspect of the VR industry. The complaint states it owns the top-selling hardware with the Quest 2. In addition it also has the most popular app store, owns seven of the most popular app developers, and also has the best-selling VR app of all time (presumably Beat Saber). Now it wants to add a very popular workout app to its roster. The FTC is crying foul because it competes with Meta’s own workout app. Therefore, it’s accusing Meta of trying to “buy its way to the top,” which some argue is what it did with its purchase of WhatsApp and Instagram. The charge is when faced with competition, instead of competing, Facebook just buys its competitor.

The FTC charges that Meta began its journey to conquer the market by purchasing Oculus VR in 2014. Since then it’s gone on to become the leading VR brand, and has also scooped up popular VR developers along the way. Within is just the latest company it hopes to acquire, which the FTC says will reduce competition in the marketplace. Because of that dilution of competition, the acquisition would be illegal, according to the FTC. “If Meta is allowed to buy Within, that competitive pressure will slacken. That lessening of competition violates the antitrust laws,” reads the complaint.

According to a statement from Meta posted by PCMag, Meta is ready to battle it out in court. “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. We are confident that our acquisition of Within will be good for people, developers and the VR space.”

For now, the commission successfully passed a vote to seek a restraining order and preliminary injunction against the buyout. That allowed it to file a Federal request for relief in the U.S. District Court for the Northern District of California in order to halt the transaction.