Washington — The Federal Trade Commission issued an injunction on Wednesday to prevent Meta (formerly known as Facebook) from buying a virtual reality company called Within. The agency is approaching a technology transaction.
The Antimonopoly Act is the first proceeding to be filed against one of the tech giants under the Commission’s chairman and a major progressive critic of corporate concentration, Lina Khan. Kahn argues that regulators must stop violations of competition and consumer protection laws not only in areas where companies are already huge, but also on the cutting edge of technology, including virtual reality and augmented reality. did.
The request for an FTC injunction puts Mr. Khan on a collision course with Meta’s CEO Mark Zuckerberg, who has also been nominated as a defendant in the request. He has invested billions of dollars in building products for virtual and augmented reality and is convinced that the immersive world of Metaverse is the next technology frontier. Proceedings can undermine those ambitions.
“Meta could have chosen to try to compete with in for benefits,” FTC said. In that proceedingWas filed in the United States District Court for the Northern District of California. “Instead, we chose to buy a top company that the government calls a” vital “category.”
In a statement, Meta said the FTC proceedings were “based on ideology and speculation, not evidence.” The idea that this acquisition will lead to anti-competitive consequences in a dynamic space with as much entry and growth as online and connected fitness is simply unreliable. The company added that the proceedings are an attack on innovation, and the agency “sends a chilling message to anyone who wants to innovate in VR.”
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Last year, Meta announced that it would acquire Within, which produces a very popular fitness app called Supernatural, for a private amount. The company promotes virtual reality headsets for fitness and health purposes.
The proceedings are part of a series of proceedings against other large technology companies such as Meta, Google, Apple and Amazon, and are facing increasing scrutiny of their power and superiority. Under Mr. Khan’s predecessor, FTC filed a proceeding against Facebook, claiming that the company had stopped its initial competition through the acquisition. The Justice Department also sued Google for whether the company abused its online search monopoly.
More cases may come. FTC is investigating whether Amazon violates antitrust laws, and the Justice Department is inquiring about Google’s advantage over advertising technology and Apple’s App Store policy.
Zuckerberg keeps Meta away from the roots of social networking as its apps such as Facebook and Instagram face challenges such as intensifying competition, privacy and misinformation.
To support the push to the Metaverse, Zuckerberg reassigned employees and appointed the effort to be the best lieutenant. He also allowed the lieutenant to pursue some of the most popular games in VR space. 2019, Facebook purchased Beat GamesThe maker of the hit title Beat Saber, one of the top VR games on the Oculus platform.
Meta will report quarterly results later on Wednesday. The company recently reduced employee benefits and curtailed spending in uncertain economic conditions.
The FTC movement can be seen as an attempt to learn from history. The agency has approved Facebook’s acquisition of Instagram in 2012. This is a photo sharing app that has grown to over 1 billion regular users. Instagram has helped Meta dominate the market with social photo sharing, but since then other start-ups have sprung up.
John Newman, deputy director of the FTC’s competition bureau, said authorities acted on a with-in contract because Meta was “trying to buy a way to the top.” The company already owned a best-selling virtual reality fitness app, but he said he chose to buy Within’s Supernatural app “to buy a position in the market.” He described the transaction as “an illegal acquisition and we seek all appropriate remedies.”
The FTC vote to approve the submission was split 3 to 2.
This is a developing news article and will be updated.
