Meta killed plans for homegrown VR fitness app, FTC says in suit
CALIFORNIA: The US Federal Trade Commission said Meta Platforms Inc. stifled competition when it halted plans to build its own virtual reality fitness app and opted to buy Within Unlimited Inc. instead.
“Meta itself had the intentions to enter -- and thus was a reasonably probable entrant into -- the VR Dedicated Fitness App market,” the agency said in a court filing on Monday in its suit to block Meta’s acquisition of Within.
The FTC is trying to persuade a federal judge to halt the deal as the agency believes it will decrease competition in the young, virtual reality fitness market and runs afoul of antitrust laws. In the filing, the agency laid out the facts key to its argument: The acquisition will keep the tech giant from entering the space through homegrown tech, therefore denying consumers the benefit of adding another competitor to the market.
The FTC said that prior to the deal, Within’s team expected that Meta would try to enter the dedicated fitness app market. The tech giant had already hired Within’s head of product, so the startup developed competitive strategies for its app -called Supernatural -- “with the specter of Meta’s potential entry in mind,” the FTC said.
Meta already owned a VR rhythm game in which users hit targets in time to music, Beat Saber, and its founders were excited about expanding their product into a dedicated fitness app, the filing said. In early 2021, the Beat Saber team began planning and presenting the move internally.
“Meta already has engineers with the skill set to both expand Beat Saber into fitness and to build a VR dedicated fitness app from scratch,” the filing said.
As of March 2021, internal presentations were focused on transitioning Beat Saber to a dedicated fitness app.
By June, those efforts were put on hold when Meta decided to pursue a Within acquisition instead.
Meta revealed the acquisition in October, one day after announcing it would change its name from “Facebook” -- a move that canonized a shift in the company’s focus from solely social media to building and commercializing a virtual world. The digital universe, or metaverse, being built by Meta is its biggest new bet and what Chief Executive Officer Mark Zuckerberg is pitching as the future of how people connect online.