The Federal Trade Commission (FTC) has filed a complaint to block Meta from acquiring Within, the company behind virtual reality fitness app Supernatural. The FTC claims Meta bought Within to absorb competition in the fitness market, where it already owned the similar app Beat Sabre. The complaint comes after months of speculation that regulators could intervene in Meta’s growing dominance of the consumer VR market, as well as an FTC investigation that opened in December 2021.
“In recent years, Meta has set its sights on building and ultimately controlling a VR ‘metaverse,'” the FTC complaint says. It alleges that Meta saw fitness as a “killer app” market that would help it dominate the nascent virtual reality medium, and that Within threatened the dominance of its own similar app, Beat Saber, which it had acquired by buying a different studio in 2019. “Letting Meta acquire Supernatural would combine the makers of two of the biggest VR fitness apps, eliminating the beneficial rivalry between Meta’s Beat Saber app and Within’s Supernatural app,” says the complaint
The complaint lists numerous moves Meta has made to acquire virtual reality studios and consolidate its dominance in virtual reality. The company “has become a key player at every level of the virtual reality ecosystem: in hardware with its Meta Quest 2 headset, in app distribution with the Quest Store, and in apps with Beat Saber and several other titles popular,” he says. The complaint goes on to point out that Mark Zuckerberg is very serious about virtual reality and the metaverse:
“Mr. Zuckerberg has made it clear that his aspiration in the VR space is control of the entire ecosystem. Already in 2015, Mr. Zuckerberg told key Facebook executives that his vision for “the next wave of computing” was control over apps and the platform on which those apps were distributed, making it clear in an internal email to Facebook’s key executives that a key part of that strategy was for his company to be “completely ubiquitous in killer apps.”
The focus on fitness may help the FTC define a market where it can successfully argue that Meta is creating a monopoly, avoiding the problems it has had making a more general case against Meta’s acquisition of Instagram. “Beat Saber and Supernatural compete in the highly concentrated VR fitness app market,” the complaint notes.
Meta denied the claims to The Verge. “The FTC’s case is based on ideology and speculation, not evidence. 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,” spokesman Stephen Peters said in a statement. “By attacking this deal in a vote of 3-2, the FTC is sending a chilling message to anyone looking to innovate in VR. We are confident that our acquisition of Within will be good for people, developers and the VR space.”