On Wednesday, the F.T.C. (Federal Trade Commission) filed an injunction to block Meta from purchasing a virtual reality firm called Within. The lawsuit is potentially restricting Meta’s push into Metaverse and signaling a change in the agency’s approach to tech deals.
The company revealed last year that it’s buying Within for an undisclosed fee. Within produces a popular fitness app known as “Supernatural.” And it has promoted its virtual reality headsets for health and fitness purposes.
The antitrust lawsuit, filed in the US District Court for the Northern District of California, is the first under Lina Khan (the commission’s chair) against Meta.
The commission chair argued that regulators must end competition and consumer protection violations in the technology’s bleeding edge, which includes virtual and augmented reality, not only in aspects where firms have become behemoths already.
The commission application for an injunction has put Ms. Khan on some collision courses with Mark Zuckerberg, Meta’s CEO, who’s also the request or application defendant.
Mark has invested hundreds of dollars into creating items for virtual and augmented reality, fronting that the Metaverse immersive world is the next technology big thing. However, the lawsuit may end the ambition.
According to FTC, “Meta could have chosen to try to compete with Within on the merits. Instead, it chose to buy” a top company in what the government called a “vitally important” category.”
In reaction, Meta maintained that the F.T.C.’s case is “based on ideology and speculation, not evidence. The lawsuit was an attack on innovation and that the agency was sending a chilling message to anyone who wishes to innovate in V.R.”
While others think that the F.T.C. lawsuit is unusual as it pushes the antitrust law boundaries. Some say that big techs should concentrate on deals between big firms in huge markets instead of buying small start-ups in tech areas.
Meanwhile, critics have expressed that the government’s inaction has enabled Meta and other tech giants to vacuum services and become more formidable in the long run.
As the agency approved the 2012 Facebook purchase of Instagram, it has grown to help Meta dominate the internet market.
The FTC is also on the neck of other tech giants
The F.T.C. lawsuit is one of the waves of actions against Meta and other big techs like Apple, Google, and Amazon that have seen scrutiny for their dominance and power.
Before Ms. Khan’s tenure, the F.T.C. had filed a lawsuit against Facebook, arguing that the company shut down growing competition via acquisitions. Also, the Justice Department has sued Google over its alleged abuse of an online search monopoly.
There are more incoming cases. The F.T.C. is investigating if Amazon has violated antitrust laws, while the Justice Department is inquiring into Google’s dominance on advertising technology and Apple’s app store directives.