The Federal Trade Commission (FTC), which enforces antitrust laws, is about to start a real court battle over virtual reality (VR).
A high-profile trial will begin on Thursday (8th) in which the FTC will try to prevent Facebook parent company Meta Platforms Inc (META-US) from acquiring VR app developer Within Inc.
The FTC filed a lawsuit in July to stop the deal, arguing that Meta’s acquisition of Within would “potentially create a monopoly in the VR fitness software market.” It has asked a judge for a preliminary injunction to stop the possible deal.
The trial, which begins Thursday, will test the FTC’s efforts to prevent designated companies from buying to bolster their dominance; this time the latest in the virtual reality and augmented reality (AR) markets.
The FTC’s lawsuit, filed in 2020, separately sought to force Meta to drop two previous acquisitions, Instagram and WhatsApp. Both companies were in relatively nascent markets when they were acquired.
A victory by the FTC could reduce Meta’s ability to manipulate emerging technologies that CEO Mark Zuckerberg has identified as “next generation computing.”
Blocking acquisitions in this space would put even more pressure on Meta to produce its own hit software and would forego the revenue, talent, data and control gains associated with in-house innovative developers.
When Meta created its popular subscription VR fitness app, Supernatural, it touted it as a “complete fitness service” that offered “personal trainers,” “beautiful goals,” and “workouts programmed to the best music.”
But it’s only available on Meta’s Quest devices, immersive digital vision and audio-visual headsets that market research firm IDC estimates accounts for 90 percent of global shipments of VR hardware.
There are more than 400 apps available in the Quest app store, most of them created by outside developers. Meta owns Beat Saber, the most popular VR app on the Quest app store, which the company acquired in 2019.
Meta is expected to argue that the FTC failed to clearly define the relevant market, and that it competes with a range of fitness content, not just VR-specific fitness software.
Meta acquired Within in October 2021, the day after its company name was changed from Facebook to Meta.