Meta CEO took the stand in a trial for the company's acquisition deal to virtual reality fitness application 'Supernatural', as FTC seeks to block the purchase in a test of the new antitrust stance from the company.
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(Photo : Zach Gibson/Getty Images) WASHINGTON, DC - APRIL 10: Facebook co-founder, Chairman and CEO Mark Zuckerberg testifies before a combined Senate Judiciary and Commerce committee hearing in the Hart Senate Office Building on Capitol Hill April 10, 2018 in Washington, DC.
Testifying for Within Unlimited Acquisition
In a Federal Trade Commission antitrust suit, which is an effort to block Meta from purchasing the Supernatural maker 'Within Unlimited', Chief Executive Officer Mark Zuckerberg testified to defend the deal. He confirmed his attendance last October.
FTC claims that Meta might have an unfair advantage in the VR market once they have bought the competitor. This argument is an early test for FTC Chair Lina Khan and her aggressiveness toward antitrust laws.
Zuckerberg's Defense
Zuckerberg stated that not owning a virtual reality fitness application does not keep him up at night as it would boost competition and improve such applications, Bloomberg reported.
He added, "It's less important that we own the experiences, than they exist. By joining us I think we can also help them be able to pioneer the category and spur other companies who are doing other good things in this space."
Aside from this, the agency argued that Meta has the resources to build and create its own VR fitness app, instead of acquiring the top independent player in the market. The social media giant bought more than 100 smaller companies over the past decade.
FTC Lawyer Abby Dennis brought up Zuckerberg's past when several companies like Google, Yahoo, and Microsoft rejected his acquisition offers for Facebook.
Dennis asked, "You would agree with me that Facebook continued to successfully innovate even though it never got acquired and the reason why Facebook has been able to succeed for 20 years is because it continues to innovate even though it never got acquired?"
The CEO agreed but stated that the app will hold the platform together rather than the other way around. He added the acquisition is not to build every app themselves, especially that Facebook is now focusing on communication and social interaction.
Meta also relies on online advertising for its revenue, as per Fortune. Now that this did not last post-pandemic and online advertising spending is declining, Meta recently laid off 13% of its workforce. He argued that this acquisition might be the saving grace of the company given the current economic situation.
Final Decision
United States District Judge Edward Davila said that a decision will be issued by end of the year on whether this acquisition will be blocked, while the FTC conducts a much longer administrative proceeding on the deal next year.
Meanwhile, Reuters reported that Meta agreed to push back the closing of the acquisition of Within Unlimited by one month or a day after the court rules on FTC's preliminary injunction trial. This was filed with the United States District Court for the Northern District of California.
