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Meta Proceeds with Deal to Acquire Within, VR Platform, in Light of FTC Drama
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Meta Proceeds with Deal to Acquire Within, VR Platform, in Light of FTC Drama

Mark Zuckerberg speaking

The federal trade commission has long been engaged in a battle with big tech, and for those keeping score, Mark Zuckerberg, CEO of Meta, is ahead.

Meta was just given the green light to finally complete its acquisition of Within after a U.S. District Court for the Northern District of California judge determined that the FTC failed to make its case against Meta.

A bit of history

Last summer, the FTC filed an antitrust case against the company for its planned acquisition of VR developer Within. In its filing, the FTC alleged that Meta, which sells a widely-used VR headset, operates a VR app store, and owns VR apps, would harm ‘competition and dampen innovation’ for fitness VR apps if allowed to acquire Within.

Meta’s CEO testified at the close of 2022 in federal court, insisting that acquiring Within was not the end goal of Meta, and that his company simply wanted to partake in building the VR space rather than dominate it. 

Before the FTC zeroed in on Meta potentially nabbing Within, the commission brought forth an antitrust case against Meta, alleging that the Zuckerberg-owned company has created a monopoly through recent anti-competitive mergers, like Instagram and WhatsApp. The case was dismissed by the U.S. District Court for the District of Columbia in 2021, and Meta was denied a motion to dismiss the case in 2022 after the FTC filed a new amended complaint. The case is still ongoing, with a trial date set for 2024.

The new deal

As far as Meta’s acquisition of Within, financial terms have not been disclosed. According to a report by Reuters, a Meta spokesperson said Zuckerberg was “pleased that the Court has denied the FTC’s motion to block our acquisition of Within,” and the company looks forward to closing the transaction soon. The FTC did not respond to a request for comment.

Within, founded in 2014, has attracted numerous investors, including 21st Century Fox, Live Nation, Vice Media, and Annapurna Pictures.

An acquisition during a tricky time

Like countless other companies in technology and elsewhere, Meta is undergoing cost-saving measures, with Zuckerberg declaring that this year will be the ‘year of efficiency’ for the tech giant. He also stated that the company is focused on becoming stronger and more nimble, and on a recent earnings call, suggested that Meta would continue layoffs after giving employees pink slips last November.

According to a recent report by Bloomberg, Zuckerberg has asked those at a manager or director level to either transition to a different role or quit.

Can Within change the course of VR for Meta?

While the recent Meta earnings call focused heavily on AI, one may wonder what plans Zuckerberg has in store for Within, especially given the recent financials. The company reported a 2022 operating loss of over $13 billion for Reality Labs and Meta executives say they expect losses to be even higher this year.

Despite the losses, Meta says it will continue to invest in AR and VR as it sees it as a long-duration investment and will launch a next-gen headset later this year.

Zuckerberg has appeared indecisive on his feelings towards VR fitness, at least judging by his past public comments. At one point in 2021, he seemed amped by the idea of fitness subscriptions for VR, stating that he imagined it would be like one well-known connected fitness company. “Think about it like Peloton, where you have a subscription, but instead the device is VR and you put on your headset, and you’re in this amazing environment and you’re doing a boxing class with an instructor, or a dance class,” he said.

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Smiling in the image are Deanna Hasni, founder of Joya Yoga; California First Partner Jennifer Siebel Newsom; Bob Rodger, CEO of Fitness 19; Gina Baski, founder of TrifitLA; Francesca Schuler, president of California Fitness Alliance; and Don Dickerson, vice president of Fitness SF.

But last December, while in court for his battle with the FTC, Zuckerberg stated that he didn’t consider fitness apps as the golden ticket to building his metaverse. He then remarked that fitness was the fourth or fifth ‘use case’ that he considered important. Instead, Meta’s CEO said he was more interested in prioritizing building social apps. 

While his statements in court may be viewed as a legal strategy, they weren’t lost on apprehensive Supernatural users.

A cult-like following, hesitant over what the future holds for their favorite VR fitness app

Within has cultivated a bevy of fans who gush over its popular fitness app, Supernatural.

Supernatural poster

The VR-based app allows users to immerse themselves globally (and even in space) with popular music and live-action coaches. Much like Peloton, Supernatural subscribers have developed a deep connection with the coaches, particularly Leanne and Doc. An active community for Supernatural members can be found on Facebook of all places, with posters sharing that Supernatural is the most fun workout they have ever tried — and have stuck with over the long term. 

While some Supernatural users seem excited about an expected cash infusion (and the dream of Supernatural adding more hit songs), others were skeptical about the VR fitness app’s future now that Zuckerberg is on board.

“Hopefully he doesn’t decide to can the whole project. Meta just canceled Echo VR…they purchased the developer at the same time they started the process with Within. I guess there is a difference in paid membership vs a game with in-app, but still… I’d be wary of Meta canceling more projects as their whole Metaverse continues to fail,” warned one poster on news of Meta’s acquisition.

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