VR Antitrust Action As FTC Tells Meta It Can’t Buy Another VR Company

It may seem a bit early for an antitrust intervention in virtual reality, in an area that is still a niche of interest, but the FTC isn’t taking any chances. He decided to block Meta’s planned purchase of fitness company VR Within.

The aggressiveness of the decision makes it likely that Apple will face similar hurdles in acquiring virtual reality companies to help its next Apple Headset product…

Facebook parent company Meta took its first step into VR through an acquisition — buying Oculus in 2014. The company’s founder, Mark Zuckerberg, believes the metaverse is the future of the Internet, and CNN notes that Meta recently bought other virtual reality companies.

It has made a slew of VR-related acquisitions, including game development platform Unit 2 Games and Beat Games, the developer behind Beat Saber.

However, the FTC is opposing the planned purchase of another virtual reality company.

The Federal Trade Commission decided on Wednesday to block Facebook’s parent company Meta from acquiring virtual reality company Within, sending the clearest signal yet that the agency may be taking a tougher stance on Silicon Valley deals involving new technologies.

In a lawsuit filed Wednesday in federal court, the FTC said Meta had the resources to create its own VR apps, similar to those of Within, the company behind the virtual fitness program Supernatural. Instead, the FTC claims, Meta (FB) is trying to buy the upstart, who “[dampen] future innovation and competitive rivalry.

Supernatural is one of the most popular VR apps that runs on Meta’s existing VR headsets.

Meta says it’s ridiculous to enforce antitrust measures in such a burgeoning market.

The FTC said in its complaint that the deal would reduce Meta’s incentive to develop its own Supernatural competitor, or add new features to Beat Saber, a VR app owned by Meta that the FTC says occupies space similar to is with that of a fitness app. Meta stated in a blog post in response to the complaint that Supernatural is not comparable to Beat Saber and therefore the deal does not raise competition concerns. […]

Meta spokesman Stephen Peters said in a statement that the FTC case is “based on ideology and speculation, not evidence.”

“The idea that this acquisition would lead to anticompetitive outcomes in a dynamic space with as much entry and growth as online and connected fitness is simply not credible,” Peters said in the statement. “By attacking this deal by a 3-2 vote, the FTC is sending a chilling message to anyone looking to innovate in virtual reality. We are confident that our acquisition of Within will benefit people, developers and the VR space.

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I share Meta’s surprise at VR antitrust actions at such an early stage. However, given the history of actions taken only when it’s too late — when one or more companies have already achieved massive market dominance — it might make sense to try to intervene earlier.

One thing seems clear: if Meta is seen as too big a tech player to buy out potential rivals, then Apple probably is, especially given Zuckerberg’s view that the iPhone maker will become the other dominant player in virtual reality.

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