UPDATE 1-Meta battles U.S. antitrust agency over future of virtual reality - Yahoo Finance

(Recasts to bespeak FTC's opening arguments, adds lawyer's comments)

By Katie Paul and Diane Bartz

SAN JOSE, Calif./ WASHINGTON, Dec 8 (Reuters) - The Biden medication connected Thursday kicked disconnected a high-profile proceedings to effort to forestall Facebook genitor Meta Platforms Inc from buying virtual world app developer Within Inc.

The FTC sued successful July to halt the deal, saying Meta's acquisition of Within would "tend to make a monopoly" successful the marketplace for virtual world (VR) fittingness apps. It has asked the justice to bid a preliminary injunction that would halt the projected transaction.

In an opening statement, FTC lawyer Abby Dennis said the Within acquisition was portion of Meta's bid to get caller and much divers virtual world users, including customers of the company's fashionable subscription-based virtual world workout app Supernatural, who thin to beryllium older females.

That would complement Meta's existing virtual world users, who thin to skew young and male, Dennis added.

“Meta could person chosen to usage each its immense resources and capabilities to physique its ain dedicated VR fittingness app, and it was readying connected doing that earlier it acquired Within," Dennis said.

The proceedings volition service arsenic a trial of the FTC's bid to caput disconnected what it sees arsenic a repetition of the institution buying its mode to dominance, this clip successful the nascent virtual and augmented world markets.

The FTC is separately trying to unit Meta to unwind 2 erstwhile acquisitions, Instagram and WhatsApp, successful a suit filed successful 2020. Both were successful comparatively caller markets astatine the clip the companies were purchased.

A authorities triumph could crimp Meta's quality to maneuver successful an country of emerging exertion that Chief Executive Mark Zuckerberg has identified arsenic the "next procreation of computing."

If blocked from making acquisitions successful the space, Meta would look greater unit to nutrient its ain deed apps and would springiness up the gains - successful presumption of revenue, talent, information and power - associated with bringing innovative developers in-house.

Within developed Supernatural, which it advertises arsenic a "complete fittingness service" with "expert coaches," "beautiful destinations" and "workouts choreographed to the champion euphony available."

It is disposable lone connected Meta's Quest devices, which are headsets offering immersive integer visuals and audio that marketplace probe steadfast IDC estimates seizure 90% of planetary shipments successful the virtual world hardware market.

The bulk of the much than 400 apps disposable successful the Quest app store are produced by outer developers. Meta owns the astir fashionable virtual world app successful the Quest app store, Beat Saber, which it acquired successful 2019.

Meta argued that the FTC did a mediocre occupation of defining the applicable marketplace and that it competes with a full scope of fittingness content, not conscionable VR-dedicated fittingness apps.

It besides said that the FTC underestimated the contention successful the marketplace for VR-dedicated fittingness apps.

The societal media institution agreed to bargain Within successful October 2021, a time aft changing its sanction from Facebook to Meta, signalling its ambition to physique an immersive virtual situation known arsenic the metaverse.

Meta did not disclose the terms tag for the woody but tech work the Information reported that it was astir $400 million.

Zuckerberg volition beryllium a witnesser successful the trial. Other imaginable witnesses are Within CEO Chris Milk and Meta Chief Technology Officer Andrew Bosworth, who runs the company's metaverse-oriented Reality Labs unit.

The proceedings is astatine the U.S. District Court for the Northern District of California.

In summation to defending the Within acquisition, Zuckerberg is expected to beryllium questioned astir the Facebook parent's strategy for its VR business, arsenic good arsenic the company's plans to enactment third-party developers, according to a tribunal document. (Reporting by Diane Bartz successful Washington and Katie Paul successful San Jose, Calif. Editing by Alexandra Alper and Matthew Lewis)