The Biden administration’s battle against Big Tech is expanding into the metaverse.
Meta agreed to stall its acquisition of a fitness app because the Biden administration is concerned that the social media titan has become a “virtual reality empire.”
Meta, the parent company of Facebook and Instagram, sought to acquire Supernatural, a virtual reality fitness app from Within Unlimited. The Federal Trade Commission objected and sought to block the acquisition in federal court last month.
Meta agreed to a temporary restraining order halting its acquisition until either Dec. 31, or the first business day after a federal judge rules on the FTC‘s case, depending on which occurs first, according to a new court filing.
The Biden administration’s efforts to prevent Meta from growing its virtual reality business strike at the heart of the tech company’s new focus shifting away from social media.
Facebook reorganized as Meta last year, and its CEO Mark Zuckerberg announced a plan to make “metaverse” products mainstream within five to 10 years.
The metaverse business that Mr. Zuckerberg described refers to augmented and virtual reality products that connect and entertain people on hardware built by Meta, as opposed to on smartphones and computers built by its competitors, Apple and Google.
Such hardware from Meta includes Oculus products such as its Meta Quest 2 virtual reality headset that costs from $399 to $499.
Supernatural’s app is available for use on the Meta Quest 2 product, where people may choose from more than 500 workouts, according to the app’s description on Oculus’ website.
The FTC said Meta‘s pursuit of Supernatural is unacceptable.
“The company’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 in a statement announcing it was taking Meta to court last month. “The agency alleges that Meta and Zuckerberg are planning to expand Meta‘s virtual reality empire with this attempt to illegally acquire a dedicated fitness app that proves the value of virtual reality to users.”
FTC bureau of competition Deputy Director John Newman said that Meta was trying to “buy its way to the top” rather than “earning it on the merits.”
Meta responded that the FTC‘s case against its acquisition was preposterous.
“The FTC‘s case is based on ideology and speculation, not evidence,” said Meta Vice President Nikhil Shanbhag in a company blog post last month. “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.”
While Facebook‘s public reorganization as Meta is recent, its pursuit of the metaverse is not, and its metaverse business has proven lucrative. Facebook acquired Oculus in 2014 in a deal that Facebook said was worth approximately $2 billion.
In an Oculus blog post announcing changes to prices on its products in August, the virtual reality platform provided a window into the success of its business.
“People have spent over $1 billion on Meta Quest apps, helping to fuel developers’ businesses as they deliver the games and experiences that make VR great,” Oculus said.