A federal government attempt to block Meta Platforms from buying virtual reality fitness app maker Within Unlimited Inc. on antitrust grounds has been stripped of some of its core accusations.
The Federal Trade Commission in July moved to stop CEO Mark Zukerberg and his Facebook and Instagram parent from buying the company behind the popular virtual reality fitness game “Supernatural,” arguing that allowing the sale would reduce competition and dampen future innovation, ostensibly allowing Meta to corner the virtual reality fitness market.
Meta protested the accusations, arguing that the agency’s accusations were “fundamentally flawed and misguided” because “their businesses face fierce competition today and in the future from a strong and expanding set of competitors.”
FTC later dropped Zuckerberg from the suit in August, The Wall Street Journal reported, and now the agency has backed away from alleging that the deal would undermine existing competition between Meta and Within, a key component of the case for blocking the deal.
The Journal said paring back the case “appears to conform with some of Meta’s criticism” of it, including the company’s argument that Meta’s music-based game “Beat Saber” is targeted at fitness users.
Meta said Friday that the FTC’s lawsuit is still built “on ideology, not evidence,” the Journal reported, citing a Meta spokesman, who added, “What remains of the FTC’s case are speculative claims that continue to lack support in either the facts or the law.”
Looking to the FTC’s original case, they argued that Meta is a key player in the VR fitness sector.
“The company’s virtual reality empire includes the top-selling device, a leading app store, seven of the most successful developers, and one of the best-selling apps of all time,” it said in a press release upon bringing the suit that would block the sale.
Meta owns Oculus VR, which it acquired in 2014, and launched the popular device Quest 2 in 2020. It also acquired Beat Games, the developer of the hit game “Beat Saber,” in 2019. A free download of “Beat Saber” is included with each purchase of the headset.
“The agency alleges that Meta and Zuckerberg are planning to expand Meta’s virtual reality empire with this attempt to illegally acquire a dedicated fitness app that proves the value of virtual reality to users.”
“Instead of competing on the merits, Meta is trying to buy its way to the top,” FTC Bureau of Competition Deputy Director John Newman said in a statement. “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.”
