FTC sues Meta to block acquisition of VR fitness app – Meczyki.Net

FTC injunction filed Today to block the acquisition of Meta within the virtual reality studio, which is best known for its subscription VR workout app Supernatural, most recently.

The regulatory body has had a lot of clashes with Facebook, now Meta, in recent years, but it’s a pretty aggressive sign from the agency that they’re going to make Meta an M&A hell going forward.

“Meta could choose to try to compete,” the FTC said in its lawsuit. “Instead, Meta decided it preferred to only buy startups”; ,[t]Diminishing rivalry can lead to a number of detrimental consequences, including less innovation, lower quality, higher prices, fewer incentives to attract and retain employees, and fewer consumer choices.

The lawsuit comes at an inappropriate time for the company, which is struggling to balance its grand ambitions for the VR sector with runaway R&D spending on the category that negatively impacts its bottom line and its stock price. is affected by. This week, Meta took a massively unprecedented move to significantly increase prices on its Quest 2 headset, deepening the lifetime of the device.

A price for the deal within was never announced, although a report Information The deal was settled for $400 million. raised more than $52 million in venture funding from investors like a16z, according to crunchbase,

The saga looks a lot like the FTC wanting to chase down its demons to fix the Instagram acquisition and further hints to Meta that they have to grow on the merits of their internal operations and can’t rely on startups. Acquisitions in adjacent categories. Some of the FTC’s comments raise fundamental questions about why one company acquires a different company to start something other than to create a shortcut to success in the business category.

Meta has acquired several popular VR apps and game studios over the years, though the deal within appears to be one of its more significant bets.

“The FTC’s case is based on ideology and speculation, not evidence. The idea that this acquisition will lead to anti-competitive results in a dynamic space with more penetration and growth as online and connected fitness is simply not credible. By attacking the deal by a 3-2 vote, the FTC is sending a chill message to anyone looking to innovate in VR. We believe the acquisition within us will be good for people, developers, and the VR space.” A Meta spokesperson wrote in an emailed statement to Meczyki.Net.