The FTC files to block the acquisition of Facebook-parent MetaVR Company

The FTC said in a complaint filed in federal court on Wednesday that Meta has the resources to build its own VR apps similar to those made by Inin, the company behind the virtual fitness program Supernatural. Instead, the FTC claims Meta (FB) He is trying to buy the first company, which “[dampen] The Future of Innovation and Competitiveness”.

The agency, which is responsible for enforcing US antitrust laws, accused the tech giant of illegally expanding its “virtual reality empire.”

Meta has bet its future on virtual and augmented reality technologies, and the lawsuit comes as the company looks to build use cases for VR headsets. Supernatural is one of the most popular apps on the Meta headset, in some cases turning users on to the idea of ​​experiencing virtual reality for the first time.

“Instead of competing on merit, Meta is trying to get to the top,” John Newman, deputy director of the FTC’s Office of Competition, said in a statement Wednesday. “This is an illegal purchase, and we will pursue all appropriate remedies.”

Meta spokesman Stephen Peters said in a statement that the FTC’s case was “based on ideology and speculation, not evidence.”

“The idea that this acquisition would have anti-competitive effects in a space as dynamic as online and connected fitness is simply not credible,” Peters said in a statement. “By voting 3-2 against this settlement, the FTC is sending an exciting message to anyone interested in innovating in VR. We’re confident that our buy-in will be good for people, developers and the VR space.”

The FTC complained that the deal would reduce Metta’s incentive to develop its own competitor to Supernatural or add new features to Bet Saber, a VR app owned by Metta that would occupy the same position as a fitness app. In a blog post responding to the complaint, Meta said the deal did not cause any competitive harm because Supernatural does not compete with Beat Saber.

“Beat Saber and Supernatural are fundamentally different products with different user bases, different use cases and different competitive environments,” Meta said in a blog post. “And it’s not just us — the internal leadership team says the competitors are Peloton and other established global fitness brands, not Beat Saber.” Or believe it’s not just another VR game.”

Meta is fighting another FTC antitrust lawsuit that seeks to break up the tech giant, centered around its years-old acquisitions of Instagram and WhatsApp. The FTC’s move comes as lawmakers consider legislation that could rein in the power of major tech companies, including Meta.

Meta, then known as Facebook, started its work in VR in 2011. In 2014, it acquired headset maker Oculus. More recently, the developer behind Beat has made VR-related acquisitions, including Division 2 Games and Beat Games, the game development platform. Saber. Meta announced plans to buy the interior in October 2021 for an undisclosed sum.

Inside, a six-year-old VR app developer, released Supernatural in April 2020. Unlike many VR apps, it requires a subscription. Instead of simply paying a one-time fee for the app, users must pay $19 per month or $180 per year to continue working in the virtual space.

The FTC said in its complaint that Meta already controls “the top-selling device, the leading app store, seven of the most successful developers and one of the best-selling apps of all time” in the VR space. The agency cited a publicly reported email Zuckerberg sent to Meta executives in which he told them “it’s absolutely critical that the company has a complete presence in killer apps,” referring to the underlying authentication apps. The cost of new technologies.

The FTC also noted that Meta already competes with Supernatural on the BitSaber app, adding that “the two companies are currently encouraging each other to add new features and attract more users to continue the competitive rivalry that will disappear if this acquisition is approved.”

Harassment is a problem in virtual reality, and it can get worse.

The FTC’s main argument in the complaint — that the deal reduces competition by eliminating a competitor — reflects decades of antitrust thinking, said Charlotte Slaman, director of competition policy at the consumer group Public Knowledge and a former FTC antitrust official.

“Under today’s law, that’s usually the strongest legal argument,” Slaiman said. “But I think they take the role of these particular games as ‘killer apps’ to conquer the wider metaverse very seriously.”

Complaint is clearly aware of Meta’s ability to dominate the virtual reality space, Slaiman added. “It’s really refreshing to see that the FTC isn’t just ‘waiting to see what happens’ on virtual reality.”

Slaiman also said the timing of the FTC complaint could renew pressure on Congress to pass tech-focused antitrust legislation that would create new barriers between tech giants.

That bill, the American Innovation and Choices Online Act, is awaiting a Senate floor vote, but Senate Majority Leader Chuck Schumer has not put the bill on the agenda and supporters face a shrinking window before Congress goes on summer recess.

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