Meta acquisition of VR company is challenged in court

US federal regulators will open their campaign to block Facebook parent Meta’s acquisition of a virtual-reality company.

Opening statements will begin on Thursday in a San Jose, California, courtroom.

In a landmark legal challenge to a Big Tech merger, the Federal Trade Commission (FTC) has sued to prevent Meta’s acquisition of Within Unlimited and its fitness app Supernatural, saying it would hurt competition and violate antitrust laws.

Meta Platforms has been unsuccessful in its bid to have the case dismissed after arguing the US failed to prove the virtual reality market is concentrated with high barriers to entry.

After Meta argued the lawsuit contained “nothing more than the FTC’s speculation about what Meta might have done”, the FTC revised its complaint in October to narrow the focus its allegations.

Meta CEO Mark Zuckerberg
Meta CEO Mark Zuckerberg is expected to give evidence (PA)

Over the summer, FTC chairwoman Lina Khan and the other two Democratic commissioners voted to block the deal, with two Republicans going the other way.

The Within case is part of a more aggressive stance by the FTC following its 2020 antitrust lawsuit against Facebook seeking remedies – which could include a forced spin-off of Instagram and WhatsApp or a restructuring of the company.

CEO Mark Zuckerberg was dropped as a defendant in the case in August but is expected to give evidence.

Under Zuckerberg’s leadership, Meta began a campaign to conquer virtual reality in 2014 with its acquisition of headset maker Oculus VR.

Since then, Meta’s VR headsets have become the cornerstone of its growth in the virtual reality space, the FTC noted in its suit.

Fuelled by the popularity of its top-selling Quest headsets, Meta’s Quest Store has become a leading US platform, with more than 400 apps available to download, according to the agency.

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