Meta Permitted to Buy VR Fitness Firm, Despite Monopoly Concerns – Here’s Why

The SF Bay Area judge released his antitrust ruling on the Mark Zuckerberg tech giant Monday

Meta employee Ryan Carter (L) helps a member of the media with an Oculus virtual reality headset demonstration
Justin Sullivan/Getty Images

On Friday, Meta Platforms Inc. beat an antitrust lawsuit brought by the Federal Trade Commission over the acquisition of VR fitness firm Within – and now, the federal judge who presided over the case released his full 65-page ruling detailing the “why.”

In the case decided before the U.S. District Judge Edward Davila in San Jose, California, the jurist found Meta “would have found it challenging to compete with Within” and its popular Supernatural app, in part because it “presently lacks the capability to create fitness content,” the The Wall Street Journal reported Monday.

Davila also noted that “evidence also indicates that Meta lacked the necessary studio production capabilities to create and film VR workouts.”

Eyes were on this particular antitrust case due to its potential to inform rulings on future federal government antitrust lawsuits.

The FTC’s attempt to deny Meta’s acquisition from going through wasn’t all for naught, however, as the judge sided with the FTC “that virtual-reality fitness products are a distinct market” and away from Meta’s lawyers attempt to generalize the field, the WSJ reported.

Further, Davila agreed that FTC’s case was “premised on a valid legal theory – namely, that the transaction would lessen competition because the industry would benefit from Meta’s independent entry into the market.”

The Wall Street Journal wrote that Meta’s lawyers argued against this theory, known as the “actual potential competition” doctrine, which “has never been explicitly endorsed by the Supreme Court.”

This effectively means there’s a window for the FTC to challenge Meta’s acquisition of Within through an appeal before the Ninth Circuit Court of Appeals, “or through an administrative proceeding in an FTC in-house tribunal,” according to the Journal.

As TheWrap previously reported, FTC Bureau of Competition Deputy Director John Newman described that the antitrust action against Meta was undertaken because the government felt “instead of competing on the merits, Meta is trying to buy its way to the top.”

“Meta already owns a best-selling virtual reality fitness app, and it had the capabilities to compete even more closely with Within’s popular Supernatural app,” Newman said. “But Meta chose to buy market position instead of earning it on the merits. This is an illegal acquisition, and we will pursue all appropriate relief.”

Judge Davila disagreed, and now Meta can finalize the Within purchase, which it had delayed from December until the end of January.