Meta has filed a motion to dismiss the Federal Trade Commission’s complaint regarding its acquisition of Within.
The Los Angeles-based VR company is creating Supernatural, a rhythm game-turned-workout app that, in our humble opinion, is a great legitimate use of VR. It makes sense that Meta would want to take over the company, but the FTC has raised concerns that it could be an anti-competitive acquisition.
“Meta and [CEO Mark] Zuckerberg plans 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,” the agency wrote in July.
Today, Meta filed a petition in the court for the Northern District of California to push the deal forward despite the FTC’s complaint.
Initially, the FTC argued that the acquisition would limit competition in the VR fitness market. The agency wrote: “Meta is already participating in this wider market with its Beat Saber app, as is Within with its premium rival app Supernatural. Both companies are currently boosting each other to keep adding new features and attracting more users. , a competitive rivalry that would be lost if the acquisition were allowed, but the FTC filed a new lawsuit last week and withdrew those allegations.
If we want to get technical about it, Beat Saber is not really a fitness app – some people sweat just because the game requires a lot of quick arm movements, but Beat Saber was not designed for exercise. The games are just comparing because they are both rhythm games.
Either way, Meta capitalized on the FTC’s less intense filing by arguing that the complaint shouldn’t stand in the way of the acquisition. If Meta were to acquire Within, the FTC would have a much harder time forcing the merged companies to separate.
“After dropping its claim that Meta and Within compete for fitness consumers, the FTC only proceeds on the pretense that Meta and Within could compete, and that fear of such competition drives inside and others to compete more vigorously,” the Meta filing reads. But the company’s lawyers say that, according to case law, “perceived potential competition” has not been raised in court as grounds for blocking a vertical merger.
“The FTC alleges only that widespread fear of potential Meta entry is incitement to competition,” the filing states.
Meta has made a huge bet on virtual reality; in 2021, the company spent over $10 billion on its Reality Labs division, and it doesn’t see that amount of revenue anywhere. At its developer conference this week, the company formerly known as Facebook unveiled its high-end VR headset, the Quest Pro, which retails for $1,499.99.
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