FTC Sues to Block Meta’s Purchase of VR Fitness App

Meta CEO Mark Zuckerberg is attempting an “illegal acquisition” to expand his “virtual reality empire,” the FTC said Tuesday in a lawsuit seeking to block the company’s purchase of Within Unlimited and its virtual reality fitness app Supernatural. The commission recorded a 3-2 party line vote to authorize staff to seek a temporary restraining order and preliminary injunction with the U.S. District Court for the Northern District of California. Meta’s “virtual reality empire includes the top-selling device, a leading app store, seven of the most successful developers, and one of the best-selling apps of all time,” the FTC said. The agency alleges Meta is attempting to acquire a “dedicated fitness app that proves the value of virtual reality to users.” The company is trying to buy its way to the top instead of competing on the merits, said FTC Competition Bureau Deputy Director John Newman. The case is “based on ideology and speculation, not evidence,” a Meta spokesperson said in a statement. “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.” The commission’s party-line vote sends 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.” The FTC claims the deal violates Section 7 of the Clayton Act, which prohibits transactions that may “substantially” decrease competition, “or tend to create a monopoly,” or Section 5 of the FTC Act.