States Urge Court To Block Meta's Acquisition of Supernatural

More than two dozen attorneys general are backing the Federal Trade Commission's attempt to block Meta Platform's acquisition of Within Unlimited, developer of the virtual reality fitness app Supernatural.

“If the preliminary injunction is not granted, the acquisition will proceed, and Meta will be able to access Within’s confidential strategic information and to begin integrating the firms,” attorneys general from 23 states, the District of Columbia and Guan write in a friend-of-the-court brief filed Monday with U.S. District Court Judge Edward Davila in San Jose. “Immediate harms to competition and innovation may result.”

In July, the FTC brought an antitrust suit against Meta over the planned $400 million deal, claiming that merger would diminish competition in the market for virtual-reality fitness apps. The agency sought an injunction prohibiting the merger from going through.

The FTC initially alleged that Meta's Beat Saber competes with Supernatural in the market for virtual reality fitness apps -- meaning the acquisition would eliminate one of Meta's rivals.



Last month, the FTC scaled back its complaint, which now alleges that the merger could diminish “potential competition” in the market for dedicated virtual reality fitness apps.

Meta recently asked Davila to dismiss the FTC's complaint, essentially arguing that the FTC's allegations -- even if proven true -- would not show that the deal violates antitrust law.

The states joining in the friend-of-the-court brief also brought a separate antitrust lawsuit against Meta in 2020 over its acquisition of Instagram and WhatsApp.

U.S. District Court Judge James Boasberg in Washington, D.C. dismissed the states' complaint in that case, ruling that the attorneys general waited too long after the acquisitions to sue. The states are appealing Boasberg's decision to the D.C. Circuit Court of Appeals.

The attorneys general reference that earlier matter in their request to Davila, arguing that Meta “will likely argue in any future related antitrust challenge--as it successfully argued in the district court in the states’ pending antitrust case against Meta--that it will be too late to unwind any competitive harms that result from the acquisition of Within once the acquisition has closed.”

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