“For far too long, Facebook and its parent company, Meta, have operated unchecked with their ‘catch and kill’ strategy, and we cannot allow that to continue in the metaverse. We applaud FTC Chair Lina Khan and members for voting this complaint out of committee. It’s a critical first step in ensuring that Zuckerberg plays by the same rules as everyone else,” said Sacha Haworth, Executive Director of the Tech Oversight Project.
⚖️ ICYMI: The Verge: FTC files to block Meta from buying VR fitness studio Within
By Adi Roberston on 7/27/22
The Federal Trade Commission (FTC) has filed a complaint to block Meta from acquiring Within, the company behind the virtual reality fitness app Supernatural. The FTC claims Meta bought Within to absorb competition in the fitness market, where it already owned the similar app Beat Saber. The complaint follows months of speculation that regulators might intervene in Meta’s growing dominance of the consumer VR market, as well as an FTC probe reportedly opened in December of 2021.
“Meta in recent years has set its sights on building, and ultimately controlling, a VR ‘metaverse,’” the FTC’s complaint says. It alleges that Meta saw fitness as a “killer app” market that would help it dominate the nascent VR medium, and Within threatened the dominance of its own similar app, Beat Saber, which it had acquired by buying a different studio in 2019. “Letting Meta acquire Supernatural would combine the makers of two of the most significant VR fitness apps, thereby eliminating beneficial rivalry between Meta’s Beat Saber app and Within’s Supernatural app,” says the complaint.
The complaint lists numerous moves Meta has made to acquire VR studios and cement its dominance in VR. The company has “become a key player at each level of the VR ecosystem: in hardware with its Meta Quest 2 headset, in app distribution with the Quest Store, and in apps with Beat Saber and several other popular titles,” it says. The complaint goes on to note that Mark Zuckerberg is very serious about VR and the metaverse.
“Mr. Zuckerberg has made clear that his aspiration for the VR space is control of the entire ecosystem. As early as 2015, Mr. Zuckerberg instructed key Facebook executives that his vision for ‘the next wave of computing’ was control of apps and the platform on which those apps were distributed, making clear in an internal email to key Facebook executives that a key part of this strategy was for his company to be ‘completely ubiquitous in killer apps.’”
The focus on fitness may help the FTC define a market where it can successfully argue Meta is creating a monopoly — avoiding the problems it’s had making a more general case against Meta’s acquisition of Instagram. “Beat Saber and Supernatural compete in the highly concentrated VR fitness app market,” the complaint notes.
Meta denied the claims to The Verge. “The FTC’s 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,” said spokesperson Stephen Peters in a statement. “By attacking this deal in a 3-2 vote, the FTC is sending a chilling message to anyone who wishes to innovate in VR. We are confident that our acquisition of Within will be good for people, developers, and the VR space.”