Meta battles US antitrust agency over the future of virtual reality
The Federal Trade Commission, which enforces antitrust law, is about to engage in a real-life courtroom fight over virtual reality. On Thursday, a high-profile trial was set to kick off in which the FTC would try to prevent Facebook parent Meta Platforms from buying virtual reality app developer Within.
The FTC sued in July to stop the deal, saying Meta’s acquisition of Within would “tend to create a monopoly” in the market for virtual reality (VR) fitness apps. It has asked the judge to order a preliminary injunction that would halt the proposed transaction.
The trial will serve as a test of the FTC’S bid to head off what it sees as a repeat of the company buying its way to dominance, this time in the nascent virtual and augmented reality markets.
The FTC is separately trying to force Meta to unwind two previous acquisitions, Instagram and Whatsapp, in a lawsuit filed in 2020. Both were in relatively new markets at the time the companies were purchased.
A government victory could crimp Meta’s ability to manoeuvre in an area of emerging technology that Chief Executive Mark Zuckerberg has identified as the “next generation of computing.” If blocked from making acquisitions in the space, Meta would face greater pressure to produce its own hit apps and would give up the gains — in terms of revenue, talent, data and control — associated with bringing innovative developers in-house.
Within developed popular subscription-based virtual reality workout app Supernatural, which it advertises as a “complete fitness service” with “expert coaches,” “beautiful destinations” and “workouts choreographed to the best music available.” It is available only on Meta’s Quest devices, which are headsets offering immersive digital visuals and audio that market research firm IDC estimates capture 90 per cent of global shipments in the virtual reality hardware market. The majority of the more than 400 apps available in the Quest app store are produced by external developers. Meta owns the most popular virtual reality app in the Quest app store, Beat Saber.