“FTC Accuses Meta of Squashing Competition in VR Fitness App Market”

In February 2021, Michael Verdu, the former Vice President of Augmented Reality and Virtual Reality at Meta, testified in a federal court that Mark Zuckerberg, the CEO of Meta, had asked him to look into acquiring a virtual reality-powered fitness app. This conversation was part of a wider effort by Meta to expand into the virtual reality-powered fitness market. The Federal Trade Commission (FTC) is using Verdu’s testimony, as well as that of other Meta employees, to argue that Meta’s acquisition of Within, the maker of the popular workout game “Supernatural,” is squashing competition in the niche market of virtual reality-powered fitness apps and depriving consumers of future choices. Meta’s lawyers have argued that the company was never serious about building its own fitness app. Zuckerberg is expected to testify in the case. Meta has invested billions of dollars in its vision of a “metaverse,” a virtual reality space in which people can work, shop, and spend time with others in immersive digital realms accessed through augmented and virtual reality services. The company has faced declining revenue and has had to lay off 13% of its workforce this year. Despite this, Meta has remained committed to investing in VR and expects its virtual and augmented reality division to lose even more money next year. The company has dominated the VR headset market, with 78% of all virtual reality headset sales in 2021. However, it faces increasing competition from the likes of PlayStation, Apple, High Tech Computer Corp., and Pico. Meta believes that VR fitness apps could help solve some of the obstacles to widespread adoption of VR, such as the lack of female users and older users, and could also help to increase the average time spent on VR headsets.