The FTC is on a warpath when it comes to Big Tech and mergers. In recent days, both Meta and Microsoft have found themselves under fire as the Federal Trade Commission (FTC) looks to push antitrust law. The trial involves Meta’s desire to purchase Within, a virtual reality (VR) app developer. According to the FTC, the deal is the tech giant’s attempt to buy its way to dominance in the VR and AR markets.
The argument is that the purchase would create a monopoly. A lawyer with the FTC, Abby Dennis, said the company could have built its own VR fitness app, something it was apparently doing before the acquisition. However, it instead acquired Within, which she said was an attempt to pull in a more diverse VR user base.
- Within makes a popular VR workout app called Supernatural, which has a large older female user base. Dennies pointed out that it would complement Meta’s existing younger male VR users.
- Meta acquired social media companies Instagram and WhatsApp in 2012 and 2014, with both being in newer markets that expanded its influence. These deals are also seeing the FTC’s attention.
Meta could face serious consequences should it lose, including restrictions when trying to take action surrounding emerging VR technology. It would also push the tech company to develop its own apps and technologies, potentially hampering its ability to bring in external talent and revenue.
- Meta’s Quest virtual reality device holds over 400 apps, most of which were created by external developers.
- Beat Saber is a great example of an acquired app that performs exceptionally well.
Meta argued that Supernatural does not only compete with VR fitness apps. Instead, the tech giant pointed out that it is competing with a lot of fitness content. Additionally, the company stated that there is more competition in the VR fitness space than the FTC realizes.
- While Meta and its VR offerings stand out, there is a lot of competition. That includes VR offerings from Microsoft, Google, and Samsung. Moreover, there are many other startups and dedicated VR companies.
- The agreement to acquire Within occurred in 2021, right after Facebook changed its name to Meta. At that time, the company started opening up about the metaverse and its desire to build immersive virtual spaces.
Zuckerberg is set to take the stand, with other potential witnesses including Andrew Bosworth, the company’s chief technology officer, and Within founder Chris Milk. While the FTC is pressuring Meta, the company’s lawyers are confident, saying the FTC is making “an aggressive effort to make law with no real evidence.”
Meta’s lawyer Mark Hansen said Thursday in front of a US district judge, “If the FTC’s speculation about what a firm might do would be enough to block an acquisition, every vertical acquisition would be blocked.”
Regulators might not have to win to get what they want. The trial against Meta and the attempt to stop Microsoft’s acquisition of Activision are both part of the FTC’s attempt to try a new strategy to push antitrust law. A major aspect of the new approach is that it focuses on competition in the future when dealing with a growing market, such as VR, instead of the traditional attempt to concentrate on mature markets.
Spencer Hulse is a news desk editor at Grit Daily News. He covers startups, affiliate, viral, and marketing news.
