Meta strikes back with the FTC for the acquisition of a virtual reality company


By MARCY GORDON

WASHINGTON (AP) — Federal regulators and Facebook parent Meta are squabbling over Meta’s proposed acquisition of virtual reality company Within Unlimited and its fitness app Supernatural.

In a landmark legal challenge to a Big Tech merger, the Federal Trade Commission is suing to block the deal, saying it would harm competition and violate antitrust laws.

Meta fired back on Thursday, asking a federal court in San Jose, Calif., to dismiss the FTC’s July request for an injunction against the acquisition.

The tech giant said in its court filing that the government failed to establish that the virtual reality market was concentrated with high barriers to entry. The allegations in the agency’s lawsuit “are nothing more than FTC speculation about what Meta might have done,” the company said. He claims the FTC failed to meet two key legal standards established in previous cases.

In a statement Thursday, the FTC noted that it revised its complaint last week in a way that narrowed the focus of its allegations. In its new form, the statement read, “We are confident that the District Court’s complaint will not be dismissed and that this matter will be heard.”

Meta, in its own statement, said, “The FTC’s attempt to resolve its ill-conceived complaint still ignores the facts and the law, and relies on pure speculation about a hypothetical future state.”

He added that he believes the suit should be dismissed as there is “dynamic competition in the fitness space and across (virtual reality), and our acquisition of Within will be good for people, developers and the industry.” VR space”.

The FTC’s vote last summer to try to block the acquisition of Within was 3 to 2, with Chairwoman Lina Khan and the other two Democratic commissioners approving it and the two Republicans opposing it.

The initial FTC lawsuit named CEO Mark Zuckerberg as a defendant along with Meta, but it was dropped in August.

Under Zuckerberg’s leadership, Meta launched a campaign to conquer virtual reality in 2014 with its acquisition of headset maker Oculus VR. Since then, Meta’s VR headsets have become a cornerstone of its growth in the virtual reality space, the FTC noted in its lawsuit. Fueled by the popularity of its best-selling Quest headsets, Meta’s Quest Store has grown into a leading US app platform with more than 400 apps available for download, according to the agency.

Meta has purchased seven of the most successful virtual reality development studios and now has one of the largest catalogs of virtual reality content in the world, according to the FTC. Its acquisition of the Beat Games studio gave Meta control of the popular Beat Saber app.

In its lawsuit against the acquisition of Within, the FTC cited a 2015 email from Zuckerberg to top Facebook executives saying that his vision for “the next wave of computing” was application control as well as the platform. form on which these applications are distributed. The email says a key part of that strategy is for the company to be “completely ubiquitous in apps that kill,” which are apps that prove the value of technology.

Zuckerberg announced ambitious plans a year ago to build the “metaverse” – a virtual reality construct intended to supplant the internet, merge virtual life with real life and create endless new playgrounds for everyone. world.

On Tuesday, the Menlo Park, Calif.-based company unveiled a $1,500 virtual reality headset in hopes that people will soon be using it to work and play in the metaverse.

The action marked a new salvo by the FTC against Meta – the owner of Instagram, Messenger and WhatsApp in addition to Facebook – in the agency’s fight against what it considers anti-competitive conduct in the technology industry. .

The FTC filed an antitrust lawsuit against Facebook in late 2020. With that action, the agency is seeking remedies that could include a forced split from Instagram and WhatsApp, or a corporate restructuring.

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