FTC Drags Facebook Parent Company Meta to Court

FTC Meta

Image Source: Game Developer

The Federal Trade Commission took action on Wednesday to prevent Facebook parent company Meta from buying virtual reality startup Within, sending the strongest message yet that the organization might be more aggressive when it comes to Silicon Valley acquisitions involving cutting-edge technologies.

The FTC said in an injunction that Meta has the capabilities to create its own VR programs that are comparable to those created by Within, the firm that is responsible for the virtual fitness program Supernatural. The FTC asserts that Meta (FB) is instead attempting to acquire the fledgling business, which would “[dampen] future innovation and competitive rivalry.”

The agency, which is in charge of upholding US antitrust rules, charged the tech giant with trying to build up its “virtual reality empire illegitimately.”

The future of Meta is dependent on augmented and virtual reality, and the injunction comes as the business works to develop use cases for its VR devices. For example, one of the most downloaded apps on Meta’s headgear is Supernatural, which in some cases, introduces users to the concept of exercising in virtual reality for the first time.

According to Meta spokesperson Stephen Peters, the FTC’s argument is “based on ideology and assumption, not proof.”

The FTC is suing Meta again in an effort to disband the tech behemoth on its long-ago purchases of WhatsApp and Instagram. Additionally, the FTC’s move comes as legislators debate legislation that may limit the influence of dominant big digital corporations like Meta.

When it purchased VR headset manufacturer Oculus in 2014, Meta, then known as Facebook, made its debut in the industry. A number of VR-related purchases have been made by it more recently, including the game creation platform Unit 2 Games and Beat Games, the company that created the well-known game Beat Saber. In October 2021, Meta disclosed its intention to purchase Within for an unknown sum.

Read Also: Meta COO Sheryl Sandberg to step down from her role after 14 years with Facebook

Meta is looking to dominate the VR space

In April 2020, Within, a six-year-old maker of VR apps, released Supernatural. For users to continue exercising in virtual reality, they must pay $19 per month or $180 annually, unlike some other VR apps that need a one-time payment.

According to the FTC’s complaint, Meta already has control over “the best-selling device, a top app store, seven of the most successful developers, and one of the best-selling apps of all time” in the VR market. 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”—apps that will demonstrate the true worth of new technology.

According to Charlotte Slaiman, competition policy director at the consumer organization Public Knowledge and a former FTC antitrust official, the FTC’s main argument in the complaint—that the deal would reduce competition by eradicating a competitor—reflects decades of established antitrust thinking.

According to Slaiman, the case expressly acknowledges Meta’s potential to rule the virtual reality market. “It’s incredibly encouraging to see the FTC taking action in VR right away,” one person said.

Slaiman added that the timing of the FTC complaint could increase pressure on Congress to establish an antitrust law that focuses on technology and creates new barriers across the various lines of business of internet firms.

The Senate is set to vote on the American Innovation and Choice Online Act, but because Senate Majority Leader Chuck Schumer has not placed it on the schedule, time is running out before Congress adjourns for the summer.

Opinions expressed by New York Wire contributors are their own.