Attorney General Bonta Supports Effort to Block Meta Acquisition of Popular Virtual Reality Fitness App

Tuesday, November 8, 2022
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OAKLAND – California Attorney General Rob Bonta, as part of a coalition of 25 attorneys general, submitted an amicus brief in the U.S. District Court for the Northern District of California in support of the Federal Trade Commission’s (FTC) effort to block Meta from acquiring the popular virtual reality fitness company, Within Unlimited. The acquisition of Within Unlimited, and its app “Supernatural,” is part of Facebook’s – now Meta’s – broad buy-or-bury strategy that is designed to thwart competition at the expense of users. In 2020, Attorney General Bonta joined a bipartisan coalition in filing a lawsuit challenging Facebook’s acquisition of Instagram and WhatsApp for illegally suppressing the emergence and growth of rival social media networks. In today’s brief, a coalition of many of those same states urges the court to block Meta from acquiring a potential competitor in the market for virtual reality fitness apps until the FTC completes its administrative proceeding.

“Meta’s acquisition of Within Unlimited would eliminate competition in the virtual reality fitness space at a critical moment in the development of this market,” said Attorney General Bonta. “Time after time, we've seen Meta choose to gobble up its competitors instead of actually competing. As Attorney General, I'm committed to protecting an equal playing field for all, and I fully stand behind FTC's effort to protect competition in this burgeoning marketplace.”

Meta has invested more than $25 billion in virtual reality – or VR – and related technologies since 2020. Meta is a dominant player, currently leading the market in sales of VR headsets, operating the leading VR app store, and developing a range of full-featured VR apps. Meta also has completed at least seventeen VR-related acquisitions in recent years. While Meta does not currently have its own virtual reality dedicated fitness app, it is already innovating to enter the virtual reality dedicated fitness market – positioning itself to be a powerful, direct competitor in the market for virtual reality dedicated fitness apps like “Supernatural.”

Within Unlimited, which developed the app “Supernatural,” is a leader in the virtual reality fitness space, offering 800+ instructor-led workouts located in virtual settings around the world. In October 2021, Meta announced plans to acquire Within Unlimited for a reported $400 million, and in July 2022, the FTC filed suit in the U.S. District Court for the Northern District of California seeking to block Meta’s acquisition of Within Unlimited under Section 7 of the Clayton Act, which prohibits mergers that may substantially lessen competition or create a monopoly, while the FTC completes its administrative proceeding. 

In its brief in support of the FTC, the coalition highlights that Meta’s acquisition of Within Unlimited is consistent with Meta’s anticompetitive history of buying up competitors in a market instead of building its own product in that market to compete for market share. If allowed to proceed, Meta’s acquisition of Within Unlimited would substantially lessen competition and potentially create a monopoly in the virtual reality fitness space. Because of this, the coalition argues that the court should grant the FTC's request for a preliminary injunction blocking the acquisition while the FTC makes its case.

Attorney General Bonta is committed to promoting a free, fair, and competitive marketplace for all. Earlier this month, Attorney General Bonta filed a lawsuit asking the D.C. District Court to temporarily block Albertsons' planned $4 billion payment of a special dividend to shareholders, amid concerns that the payment would dramatically hamper Albertsons' ability to compete. The Attorney General also recently joined a bipartisan lawsuit against two of the world’s largest chemical companies, Syngenta and Corteva, for violations of federal antitrust law and is actively litigating an antitrust case against multinational gas firms SK Energy Americas and Vitol for taking advantage of market disruption following a 2015 explosion at a gasoline refinery in Torrance, California. Last year, Attorney General Bonta joined another bipartisan lawsuit against American Airlines and JetBlue challenging an anticompetitive joint venture between the companies known as the Northeast Alliance. 

In filing the brief, Attorney General Bonta joins the attorneys general of New York, Alaska, Connecticut, Delaware, the District of Columbia, Guam, Hawaii, Idaho, Illinois, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oregon, Rhode Island, Utah, and Washington.

A copy of the brief is available here.

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