Facebook CEO Mark Zuckerberg testifies before the U.S. House of Representatives Financial Services Committee during a hearing on Facebook and its Impact on Financial Services and the Housing Sector on Capitol Hill in Washington on May 23. October 2019.
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Federal Trade Commission is suing to block Facebook owners Meta from the purchase of Within Unlimited, a company that produces the virtual reality fitness app Supernatural, the agency announced on Wednesday.
The FTC alleges that Meta is “trying to take the lead,” rather than compete on merit in the VR-specific fitness app market, FTC Competition Bureau Deputy Director John Newman said. in a statement.
“Meta already has a best-selling virtual reality fitness app, and it’s more likely to compete with Within’s popular Supernatural app,” Newman said. “But Meta chose to buy the market position instead of earning it on merit. This is an illegal acquisition and we will pursue all appropriate relief measures.”
A spokesperson for Meta said in a statement that the case was “based on ideology and speculation, not evidence. The idea that this acquisition would lead to anticompetitive outcomes in an energy space Activity with a lot of entry and growth like online and connected fitness is simply unreliable.”
The spokesperson added that the agency’s lawsuit sends a “cold message to anyone who wants to innovate in VR” and said Meta is “confident that our acquisition of Within will be good for everyone, home and family.” development and the VR space.”
The lawsuit, which also names CEO and controlling shareholder Mark Zuckerberg as defendants, echoes issues that radical critics say the FTC should have raised in its Instagram and WhatsApp acquisitions. of Facebook about a decade earlier.
FTC is sued Meta . separately for an illegal monopoly on the private social networking market, where the agency alleges that Meta used those two acquisitions to beat nascent competitors and develop dominance of its own. me. Meta had previously sought to dismiss that lawsuit, though still moving forward in federal court after the judge allowed the FTC to amend its complaint.
When the exclusive case was first filed in 2020, Facebook’s chief counsel speak The FTC is looking to “redo” its initial reviews of the Instagram and WhatsApp merger, which happened years earlier. The FTC’s new lawsuit seeking to block the acquisition of Within shows the agency is trying to make larger changes than before to prevent an even greater buildup of power before the merger is allowed. close the door.
Although federal antitrust agencies reserve the right to sue to cancel an acquisition they have not previously attempted to prevent, in general, splitting the two merged entities will be difficult. much more than preventing them from combining in the first place.
In its press release, the FTC said that if Meta created a “specialty virtual reality fitness app marketplace” on its own, it would increase consumer choice and innovation. But buying an existing app can hinder that innovation.
If Meta is allowed to buy Within, the agency continues, competition in the VR-specific fitness app market will diminish, as “the mere possibility of Meta joining could affect competition” on the market.
The body of two Republicans and three Democrats including Chairman Lina Khan, voted 3-2 to file the lawsuit in federal court in California. The FTC press release didn’t break the vote, but Republican Commissioner Christine Wilson Share on Twitter that she was one of two dissidents.
The lawsuit could represent one of the first major events of Khan’s leadership at the commission. While the technology critic advances sworn in in June 2021the agency lacked a close vote until May of this year, when President Joe Biden’s final nominee to the committee was confirmed. With a full committee under Democratic control, Khan now has the ability to push the progressive agenda she set out before take a broader view of antitrust cases than in previous iterations of the agency.
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