Meta* Platforms came under renewed pressure from US regulators: a federal court in California began reviewing the Federal Trade Commission’s (FTC) lawsuit challenging the company’s right to acquire a VR startup InsideDevelopment of an application with fitness functions. The department believes the purchase will enable Meta* dominate the emerging VR market.
The FTC claims that Meta* abandoned its own plans to develop a virtual reality fitness application and decided to simply take over the startup Within and the Supernatural product it develops. This is a landmark process for the FTC, experts say, since banning the Within purchase would force Meta* Start developing their own software that will compete with the Supernatural application on a common basis.
The FTC filed a lawsuit back in July, accusing the company of trying to create a virtual reality monopoly like Facebook.* Bought Instagram* and WhatsApp, which has allowed it to consolidate its dominant position in the social networking segment. In the case of Within, the regulator intervenes for the first time on Meta.* preventive.
Although the meta transition* (formerly Facebook*) to the Metaverse isn’t going as quickly and smoothly as management would like, the company is making important strides along the way, and its Quest headsets are hot VR devices with a 74% market share as of Q3 2022. It will expects the decision to allow or disallow the sale of the studio to be made Inside will be accepted by the court later this year. Court records state that Meta* is poised to deny the purchase if the court sides with the FTC.
At Meta* expressed their confidence that the testimony will help the court understand that the acquisition of Within will be a boon to people, developers and the VR industry, and that the FTC’s lawsuit is based on “ideology and speculation” rather than evidence.
Industry experts predict the FTC will have a hard time winning the lawsuit. In its lawsuit, the regulatory authority relies on old court decisions from the 1970s, in which antitrust laws were used to prohibit anti-competitive transactions. According to analysts, the FTC not only wants to win the trial, but also wants to return to the old practice.
At Meta* argue that virtual reality remains a very dynamic and highly competitive industry, recalling that Sony, ByteDance and other market players have their own headsets. The company also claims that there are some fitness options for users outside of virtual reality. She intends to bring witnesses from Nike, Peloton Interactive and Equinox Media making a connected bike and app used by her own fitness company SoulCycle.
* It is included in the list of public associations and religious organizations for which the court made a final decision to liquidate or ban activities on the grounds provided for in Federal Law No. 114-FZ of July 25. 2002 “On Countering Extremist Activities”.