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Meta postpones Within acquisition till Jan 31

FTC has argued that Within’s Supernatural app is a direct competitor to Beat Saber which Meta has already acquired.

Meta Within merger

Meta has postponed its acquisition of virtual reality studio Within Unlimited, developer of the popular fitness app “Supernatural”, till January 31. The Federal Trade Commission (FTC) took Meta to court to block the merger, alleging it to be anti-competitive. FTC argued that Meta’s acquisition reduced competition in the potential “killer app” category of fitness apps. The new agreement was noted in a court filing with the United States District Court for the Northern District Of California on Tuesday, extending a temporary restraining order agreed to in August.

Meta and Within announced their merger in October 2021.  “Supernatural will continue to be operated independently as part of Reality Labs, and will continue to create fitness, wellness, and social experiences in VR, helping people achieve their goals in the most joyful and connected way possible,” the companies said in a joint statement.

In July, FTC sued Meta to stop the deal, calling Facebook a “global technology behemoth”. FTC in a statement said, “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. ” The tech giant has previously acquired several other VR studios, including ‘Beat Games’, the developers of Beat Saber which is a popular VR rhythm game that some people use to work out. FTC has argued that Within’s Supernatural app is a direct competitor to Beat Saber. Meta has denied the claim saying “Supernatural couldn’t be more different.”

Historically, Meta has acquired small social companies with the potential to become competitors like WhatsApp and Instagram. The regulator claimed that Meta’s proposed acquisition of Within would stifle competition and dampen innovation in the dynamic, rapidly growing U.S. markets for fitness and dedicated-fitness VR apps. However, in October, FTC narrowed down its complaint. The amended complaint focused on the VR-dedicated exercise app market, and dropped allegations related to the broader VR fitness app market.

Meta has denied FTC’s claim saying the regulator is wrong on the facts and the law. The tech giant says this deal will bring more competition and innovation to VR. Now both sides are involved in a face-off in court. Meta is betting big time on its Reality Labs unit, which is driving the company’s virtual-reality and metaverse efforts. In its quarterly earnings report, the wing  posted revenue of $285 million for the quarter, a decline of nearly 49% from a year ago.

Within Unlimited was founded in 2014. It creates original content for virtual reality and describes itself as “the premier destination for cinematic virtual reality.”

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