Meta is working on developing a new VR headset to deliver a whole-new metaverse experience to consumers. However, it appears that the company is going to face legal challenges along the way.
CNN reports that the Federal Trade Commission (FTC) has filed a complaint in the federal court to block Meta from acquiring another VR company called Within, the developer of a very popular virtual fitness app called Supernatural.
Within, a six-year-old VR app developer, released Supernatural in April 2020. Unlike a number of other VR apps, it requires a subscription; rather than simply paying a one-time fee for the app, users must pay $19 per month or $180 per year to keep working out in virtual space.
FTC says Meta’s acquisition of Within would “dampen future innovation and competitive rivalry”
Accusing Meta of illegally expanding its “virtual reality empire”, the antitrust regulatory body argued that the tech giant has resources to develop its own apps like Within’s Supernatural but wants to buy the upstart to “[dampen] future innovation and competitive rivalry.”
FTC Bureau of Competition Deputy Director John Newman said:
“Instead of competing on the merits, Meta is trying to buy its way to the top. This is an illegal acquisition, and we will pursue all appropriate relief.”
Meta (former Facebook) is already facing a lawsuit filed by FTC and 46 states in the U.S. over its “buy or bury” strategy. Claiming that its social media empire is built on the anti-competitive strategy to crush rivals or smaller developers, the plaintiff seeks to revert the acquisition of Instagram and WhatsApp.
Based on Meta’s business practices, FTC is taking pre-emptive steps to deter a big company from creating a monopoly in the VR industry.
Refuting the allegations, Meta claims that FTC’s lawsuit is “based on ideology and speculation, not evidence.” The company’s spokes Stephen Peters said:
“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. 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.”
Earlier, Meta CEO Mark Zuckerberg told the employees that the company was in a “very deep, philosophical competition” with Apple to build metaverse because it also expected to launch its first mixed (AR/VR) reality headset by the end of 2022.
Now, it appears that both companies will have to deal with FTC along with competing with each other to capture a decent share of the VR market. However, Apple’s CEO has clarified that its acquisition policy is different from Meta’s.
In the interview, Cook explained that his company’s acquisition strategy is not based on the intent to crush the competition. But to acquire a company to incorporate its technology into its products. Using the iPhone as an example, he listed down technologies implemented in the smartphone which were/are from acquired companies:
- Touch ID company
- Al Technology to improve Siri
- Beddit sleep tracking company
- Dark Sky-weather app