Meta to buy VR startup Within after favorable court ruling

Feb 5, 2023, 8:38 PM | Updated: Feb 6, 2023, 10:46 am
FILE - Facebook's Meta logo sign is seen at the company headquarters in Menlo Park, Calif. on Oct. ...

FILE - Facebook's Meta logo sign is seen at the company headquarters in Menlo Park, Calif. on Oct. 28, 2021. A federal judge has sided with Facebook parent Meta and cleared the way for the company to buy virtual reality startup Within Unlimited, the maker of the popular fitness app Supernatural. Federal antitrust regulators had sought to block the acquisition on the grounds that it would hurt competition in the emerging virtual reality market. But U.S. District Judge Edward Davila denied the Federal Trade Commission's request for a preliminary injunction against the deal. (AP Photo/Tony Avelar, File)

(AP Photo/Tony Avelar, File)

A federal judge has sided with Facebook parent Meta and cleared the way for the company to buy virtual reality startup Within Unlimited, the maker of the popular fitness app Supernatural.

Federal antitrust regulators had sought to block the acquisition on the grounds that it would hurt competition in the emerging virtual reality market.

But U.S. District Judge Edward Davila denied the Federal Trade Commission’s request for a preliminary injunction against the deal. The judge’s ruling said the agency did not provide sufficient evidence to prove its case.

Meta said it will now proceed with its acquisition of Within Unlimited.

The FTC had argued that Meta’s acquisition of the small company — reminiscent of Facebook’s early purchases of Instagram and WhatsApp — would hurt competition in the emerging virtual reality market.

Allowing the tech giant to buy Los Angeles-based Within Unlimited, the FTC had argued, would violate antitrust laws and dampen innovation, hurting consumers who may face higher prices and fewer options outside of Meta-controlled platforms.

Meta Platforms Inc. said in a statement late Friday after the ruling was unsealed that it is “pleased” with the decision.

“This deal will bring pro-competitive benefits to the ecosystem and spur innovation that will benefit people, developers, and the VR space more broadly,” the company based in Menlo Park, California, said. “We look forward to closing the transaction soon.”

The FTC had argued that Meta scrapped its own plans to enter the nascent VR fitness market in the summer of 2021 when it decided to buy Within Unlimited. Without the competitive threat of the tech giant’s entry into the market on its own, the agency asserts, innovation stalls, hurting end users.

“The threat is what keeps firms going,” testified economist Hal Singer, a witness for the FTC. “If I know there is a chance that someone could come in and steal my lunch,” he said, companies will innovate and constrain pricing.

But Meta executives — including CEO Mark Zuckerberg — sought to play down the notion that the company was anywhere close to creating its own VR fitness app. The Meta CEO testified that even though his company was “looking at” developing its own VR fitness app before deciding to acquire Within Unlimited in 2021, the business environment has changed and “there is almost no chance” it would start such a project today.

Under Zuckerberg’s, Meta moved aggressively into 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. Fueled by the popularity of its top-selling Quest headsets, Meta’s Quest Store has become a leading U.S. app platform with more than 500 apps available to download, according to the agency.

Meta bought seven of the most successful virtual-reality development studios, and now has one of the largest virtual-reality content catalogs in the world, the FTC noted.

Davila’s ruling, however, says the FTC needed to provide “at least circumstantial evidence” that Meta’s entry into the VR fitness market by itself, not via the acquisition, would have directly and favorably affected consumers by encouraging robust competition.

“Under this standard, the FTC’s evidence on this element is insufficient,” Davila wrote.

Representatives for the FTC did not immediately respond to a message seeking comment on Monday.

Davila also oversaw the trial of disgraced Theranos founder Elizabeth Holmes and her partner Ramesh “Sunny” Balwani. Both were sentenced to over a decade in prison for their roles in the company’s blood-testing hoax.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

starbucks...
Associated Press

Starbucks leader grilled by Senate over anti-union actions

Longtime Starbucks CEO Howard Schultz faced sharp questioning Wednesday before the Senate Health, Education, Labor and Pensions Committee
1 day ago
FILE - The overdose-reversal drug Narcan is displayed during training for employees of the Public H...
Associated Press

FDA approves over-the-counter Narcan; here’s what it means

The U.S. Food and Drug Administration on Wednesday approved selling naloxone without a prescription, the first over-the-counter opioid treatment.
1 day ago
FILE - A Seattle police officer walks past tents used by people experiencing homelessness, March 11...
Associated Press

Seattle, feds seek to end most oversight of city’s police

  SEATTLE (AP) — The U.S. Justice Department and Seattle officials asked a judge Tuesday to end most federal oversight of the city’s police department, saying its sustained, decade-long reform efforts are a model for other cities whose law enforcement agencies face federal civil rights investigations. Seattle has overhauled virtually all aspects of its police […]
2 days ago
budgets...
Associated Press

Washington moves to end child sex abuse lawsuit time limits

People who were sexually abused as children in Washington state may soon be able to bring lawsuits against the state, schools or other institutions for failing to stop the abuse, no matter when it happened.
2 days ago
Three children and three adults were killed in a shooting at a private Christian grade school in Na...
Associated Press

Nashville shooter who killed 6 drew maps, surveilled school

Three children were killed in a shooting at a private Christian grade school in Nashville on Monday, hospital officials said.
3 days ago
(Photo from KIRO 7)...
Associated Press

Police: passenger pulled jet’s emergency slide before LAX to SEA flight

A passenger on a Delta Air Lines flight out of Los Angeles International Airport was detained for triggering the plane’s emergency slide prior to takeoff, authorities said.
3 days ago

Sponsored Articles

Compassion International...

Brock Huard and Friends Rally Around The Fight for First Campaign

Professional athletes are teaming up to prevent infant mortality and empower women at risk in communities facing severe poverty.
Emergency Preparedness...

Prepare for the next disaster at the Emergency Preparedness Conference

Being prepared before the next emergency arrives is key to preserving businesses and organizations of many kinds.
SHIBA volunteer...

Volunteer to help people understand their Medicare options!

If you’re retired or getting ready to retire and looking for new ways to stay active, becoming a SHIBA volunteer could be for you!
safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Meta to buy VR startup Within after favorable court ruling