Meta Fights U.S. Antitrust Agencies Over Virtual Reality’s Future

SAN JOSE (Calif./ WASHINGTON), Dec. 8 (Reuters) – The Biden administration accused Meta Platforms Inc of trying buy its way into the metaverse. This led to a high-profile trial that aimed to stop the Facebook parent from purchasing Within Inc, a virtual reality app developer.

In July, the FTC filed a lawsuit to stop the deal. It claimed that Meta’s acquisition by Within would “tend create a monopoly in the market for VR fitness apps.” The FTC has requested a preliminary injunction to stop the transaction.

Abby Dennis, an FTC lawyer, stated that the Within acquisition was part of Meta’s attempt to acquire more virtual reality users. This included customers of Within’s subscription-based virtual reality exercise app Supernatural.

Dennis said that this would be a complement to Meta’s current virtual reality users who tend to be younger and more male and are more focused on gaming.

Dennis stated that “Meta could have chosen not to use its vast resources and abilities to build its own VR fitness app. It was already planning to do so before it acquired Within.” Dennis pointed out a plan in place for early 2021.

Dennis explained that Operation Twinkie was a plan to expand Beat Saber, a rhythm app, which the company had acquired in 2019, into the fitness market through a partnership with Peloton (PTON.O).

She quoted an email from Chief Executive Mark Zuckerberg, in which he said he was “bullish” about fitness and called the partnership with Peloton “awesome.”

Meta and Within lawyers argued that the FTC failed to define the market

They claimed the companies compete with other fitness content and not VR-dedicated apps. Meta’s lawyers also denied that plans to create a Meta-owned VR fitness application had progressed beyond low-level brainstorming. They argued that the FTC underestimated competition in the market and pointed out the potential for other tech giants like Alphabet Inc (GOOGL.O Google) and Apple Inc (AAPL.O ).