The hearing on Tuesday focused on Meta’s acquisition of Within, a VR company that makes a fitness app dubbed Supernatural.
Meta Platforms Inc (NASDAQ: META) shares closed Tuesday trading at $117.09, up 2.28 percent from the day’s opening price. The gains extended during the after-hours trading session with approximately 0.74 percent. Under the leadership of Mark Zuckerberg, Meta has been accused of buying its way up the virtual reality (VR) industry by the Federal Trade Commission (FTC).
In the past decade, Meta – formerly Facebook – had been developing its ecosystem to shape the future of technology. Moreover, Meta has made several acquisitions worth billions, which has ostensibly made the FTC think the social media giant is killing competitors.
“Instead of competing on the merits, Meta is trying to buy its way to the top,” said FTC Bureau of Competition Deputy Director John Newman in a statement about the lawsuit. “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. But Meta chose to buy market position instead of earning it on the merits.”
Mark Zuckerberg testifies that fitness in VR isn’t even his top VR app “use-case” priority. He reiterates social, gaming and productivity are priorities, and he says his email about the Peloton partnership was spurred b/c the VR biz was doing better in 2021 than forecasted.
— Dorothy Atkins (@doratki) December 20, 2022
The hearing on Tuesday focused on Meta’s acquisition of Within, a VR company that makes a fitness app dubbed Supernatural. During the hearing, Zuckerberg said that Meta focused on virtual reality (VR) fitness apps in 2021 due to its excess capital. However, the company’s stand has since changed as revenues hit a nosedive in 2022.
Furthermore, the privacy implementation by Apple Inc (NASDAQ: AAPL) has significantly reduced the revenues of most social media platforms that are heavily dependent on online advertisements.
Meta Shares and the Market Outlook
According to market data from MarketWatch, Meta shares have lost approximately 65 percent in 2022, thus retesting the lows of 2016. While most of the FAANG stocks have recorded poor performance in 2022, market strategists are positive they will be profitable in the coming years. Moreover, the global economy is heavily reliant on emerging technologies including artificial intelligence (AI) and blockchain development.
As such, Meta remains under regulatory scrutiny due to its competitive prospects and ability to kill other smaller businesses. According to aggregate data from MarketWatch, Meta has a market capitalization of approximately $303.55 billion and 2.25 billion shares outstanding.
Meta has received significant criticism for its market dominance both domestically and internationally markets. During Tuesday’s hearing, the Federal Trade Commission lawyers attempted to show that Meta had planned to compete with apps like Within, arguing that executives identified fitness as a way to expand VR use beyond its existing fan base of young male gamers.
While the FTC continues to pressure Meta to stop the Within acquisition, the commission also wants to unwind two previous acquisitions, Instagram and WhatsApp, in a lawsuit filed in 2020.
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