Facebook, now known as Meta, is once again running into trouble with the Federal Trade Commission (FTC).
Now, FTC is accusing Meta of “trying to buy its way to the top,” and has filed an antitrust suit against the company to stop it from buying another company.
Meta moved to purchase Within Unlimited, the company that develops the virtual reality workout app Supernatural, back in October 2021, for $400 million.
Now, the FTC says that the company attempts to “illegally acquire” the app itself, leaving no room for competition to grow.
“Instead of competing on the merits, Meta is trying to buy its way to the top. Meta already owns a best-selling virtual reality fitness app and it had the capabilities to compete even more closely with Within’s popular Supernatural app. But Meta chose to buy market position instead of earning it on the merits. This is an illegal acquisition and we will pursue all appropriate relief,” said John Newman, deputy director of the FTC’s Bureau of Competition, in a statement.
The FTC goes on to explain that Meta is “already a key player” in every part of the virtual reality ecosystem, owning the Quest 2, the most popular VR device, and “seven of the most successful developers and one of the best-selling apps of all time.”
With Within Unlimited and the Supernatural workout app, that market share would only increase, which makes FTC’s Bureau of Competition claim unfair advantage.
For their part, Meta responded with a statement accusing the FTC of acting on “ideology and speculation”.
“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.
By attacking this deal in a 3-2 vote, the FTC is sending 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 company said.
The FTC attack comes at a very trying time for Meta. The company had just raised the price of Oculus 2 by $100, an increase blamed on inflation, and posted some quarterly earnings that will unsettle investors.
Meta shares lost half their value in 2022 and recorded its first-ever revenue decline, as ad spending is down and Apple’s iOS privacy update from 2021 cut on Meta’s ability to track users.