The head of the Federal Trade Commission, Lina Khan, rejected the advice of the staff to intervene in a takeover of a Meta virtual reality studio. Bloomberg reports. Sources have reportedly told Bloomberg that staff had “recommended” to block Meta’s acquisition of Within, causing popular VR fitness app Supernatural. The FTC voted 3 to 2 in favor of the suit earlier this week, split along the Democratic and Republican party lines respectively.
Bloomberg’s article does not detail the content of the disagreement over Meta’s Supernatural acquisition, although it does note that “each of the commissioners had the opportunity to test Meta’s Oculus product, Within’s Supernatural and Meta’s Beat Saber.” But the report would highlight that Khan is making an unusually aggressive attempt to limit the power of companies like Meta, especially compared to past interventions against major tech players. For example, in 2013, the FTC overruled staff input who recommended filing an antitrust suit against Google and ending the investigation despite concerns about its business practices.
The FTC’s latest suit is aimed at the specific category of VR fitness apps. But an important claim is that buying Within has a bigger purpose for Meta: “to build and ultimately control a VR ‘metaverse'”. own software offering, including the fitness adjacent rhythm game Defeat Sabre. “As far back as 2015, Mr. Zuckerberg instructed key Facebook executives that his vision for “the next wave of computers” was to control apps and the platform on which those apps were distributed,” it reads. “A key part of this strategy was for his company to be ‘completely ubiquitous in great apps’.”
Meta, on the other hand, claims the lawsuit is “based on ideology and speculation, not evidence.” In an informal response to the lawsuitit says the suit “completely misunderstands the nature of the space and ignores the market reality”, positioning Beat Saber and Supernatural look more alike than they are. “The FTC has no answer to the most basic question,” writes Meta associate general counsel Nikhil Shanbhag. “How could Meta’s acquisition of a single fitness app in a dynamic space with many existing and future players hurt the competition?”