FTC didn't stop Facebook-Instagram. How about Meta-Within?

SAN JOSE, California (AP) — Facebook parent Meta is sparring with government regulators in federal court over its pending acquisition of a virtual reality fitness company Within Unlimited

CEO Mark Zuckerberg is expected to testify as a witness at the trial in San Jose, California.

At issue is whether Meta's acquisition of the small company that makes a VR fitness app called Supernatural will hurt competition in the emerging virtual reality market. If the deal is allowed to go through, the Federal Trade Commission argues, it would violate antitrust laws and dampen innovation, hurting consumers who may face higher prices and fewer options outside of Meta-controlled platforms.

Meta, the FTC argued in court this week, scrapped its own plans to enter the nascent VR fitness market in the summer of 2021 when it decided to buy Within. Without the competitive threat of the tech giant's entry into the market, 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 says it had no concrete plans to create a competing app beyond the initial discussion stage, where it concluded it had no ability to do so. Mark Rabkin, a vice president at Meta who leads its VR efforts, testified that while Meta could definitely build a VR fitness app, its chances of success would be “very low.”

“Achieving what Supernatural has achieved is remarkable and it would be very difficult for us to replicate that,” Rabkin said during a Zoom hearing Friday.

Meta, in fact, has a history of trying — and often failing — to copy rival platforms or their features, sometimes when...