Dog competition

FTC seeks injunction against Meta in anti-competitive investigation

The agency seeks to block the acquisition of Within by Meta. Lawyer Richard Hoeg and analyst Lewis Ward intervene.

Last week, the Federal Trade Commission (FTC) filed a surprise injunction against Meta – formerly Facebook – to halt the company’s $400 million acquisition of Within, developers of the VR workout app. Supernatural. The agency’s objection centers on the argument that Meta is unfairly engaging in the VR space.

“Instead of competing on the merits, Meta is trying to buy its way to the top,” John Newman, deputy director of the FTC’s Competition Bureau, said in a statement. “Meta already has a best-selling VR fitness app, and it had the capabilities to rival Within’s popular even more closely. Supernatural application. But Meta chose to buy a position on the market instead of earning it on the bottom. This is an illegal acquisition, and we will pursue all appropriate remedies.”

According to analysts, Meta is the market leader in the VR space, although Reality Labs, the VR arm of Meta, has been operate at a loss for the last two years. Thus, the acquisition of Within, which was announced in October 2021has draws attention from the FTC early on, raising questions about antitrust business practices.

However, some legal analysts, such as Richard Hoeg of Hoeg Law in Michigan, believe the FTC’s case is shaky at best.

“I think the lawsuit is the best evidence yet that the newly configured FTC intends to try to develop its historic role in antitrust enforcement,” Hoeg told GameDaily. “In general, a $400 million acquisition of a single software developer making a single product in a relatively new market is not usually where regulators would decide to step in. The fact that they chose to do it here should give pretty much every tech maker a little pause.

Hoeg – who covered this case in its Virtual Legality web series – said the antitrust conduct allegations made against Meta are unfounded, although the FTC itself has never said it believes the company is approaching a monopoly in the virtual reality sector. Rather, the agency limited its complaints to “reduced competition in the ‘dedicated’ VR fitness market.”

“The real stretch is to state that by buying from the marketplace, Meta is preventing competition that could happened if they built their own team to do it,” Hoeg explained. “We’ve never seen an argument from the FTC like that (“possible competition”), at least not at any time in the modern era.”

Hoeg isn’t the only one who finds the FTC’s Meta investigation strange. For Lewis Ward, director of research on games at the group of analysts IDC, the case is a “puzzle”.

“Of course, Meta is the leading provider of consumer VR hardware and has gained market share from software spend in this space…but to me, it’s a matter of antitrust priorities at the FTC and DOJ” , Ward told GameDaily. “How about looking into potential price-gouging practices at ‘Big Oil’ rather than going after VR’s ‘top dog’?”

Ward said it didn’t make sense for a government agency to spend resources investigating the acquisition of a virtual reality company as evidence of antitrust business practices mounts in the gas and oil sectors. oil.

“Because oil and gas is much more fundamental to the US economy – much, much more important in terms of revenue and profits, etc. – any anti-competitive practices that take place in this space are much more likely to impact the typical American family,” Ward noted. “Given the FTC/DOJ’s limited antitrust resources, it’s more that I don’t understand the process by which they decided to file this specific blocking action.”

Ward pointed out that the acquisition of Within is only one facet of the FTC’s broader investigation into Meta, but, like Hoeg, he believes the deal is pretty thin. Still, the injunction is likely to give Meta — among other companies — pause when it comes to pursuing other acquisitions in the future.

“I think that’s a shot across the bow, and one that Sony will also keep in mind once PSVR 2 comes out,” Ward said.

For the case to move forward, Hoeg explained that Meta had to prove to the courts that he was likely to win, a slim prospect in his eyes.

“Overall, I think this is a very weak case brought by the FTC that will likely be given a hard time in the courts eventually,” Hoeg explained. “That doesn’t mean the current action (temporarily blocking the deal) won’t be allowed out of respect for process here, but in the long run, I think the FTC would lose on the merits.”

The VR space is still in its infancy, and a $400 million acquisition is a pocket change from other video game industry takeovers. As such, it’s hard not to see logic in Hoeg and Ward’s views on the case. Meta may be the market leader, but that market is relatively small, which puts the FTC’s priorities in an interesting light. It will be very interesting to follow the development of this case in the future.

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Sam, the editor of, is a former freelance gaming journalist. It has been seen on IGN, PCGamesN, PCGamer, Unwinnable and many more. When he’s not writing about games, he’s most likely taking care of his two dogs or pretending to know a lot about craft coffee. Contact Sam by emailing him at [email protected] or follow him on Twitter.

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