Federal Trade Commission Abandons Effort to Block Meta’s Acquisition of Within

The Federal Trade Commission (FTC) Stops Block on Meta’s Acquisition of VR Company Within

The Federal Trade Commission (FTC) has decided to abandon its efforts to block Meta’s acquisition of the VR company Within. Reports from Bloomberg and The Wall Street Journal indicate that the agency voted to dismiss its administrative case against the company after a federal court denied its request for a preliminary injunction to halt the acquisition.

Antitrust Lawsuits and Ruling

Initially, the FTC filed antitrust lawsuits in federal court and its own court in an attempt to stop Meta from purchasing Within, the developer of the virtual reality workout app Supernatural. The commission accused Meta of attempting to buy its way to the top without earning it on merit, arguing that Meta could have developed its own VR fitness app to increase consumer choice and innovation. By acquiring Within, the FTC claimed Meta would impede future innovation and competitive rivalry.

US District Judge Edward Davila presiding over the federal case ruled in favor of Meta. While acknowledging the potential harm of mergers on competition, Judge Davila found that the FTC failed to provide sufficient evidence demonstrating how the acquisition of Within would negatively impact the market. Despite Meta’s vast resources, the judge noted that acquisition was the only feasible means for the company to enter the relevant market.

Implications and Meta’s Response

The court’s ruling did not directly affect the administrative case, but historically, antitrust officials have dropped administrative lawsuits following a denial of an injunction by a federal court. Meta completed its acquisition of Within on February 8th, solidifying the deal.

A Meta spokesperson expressed excitement about the acquisition, stating the company’s eagerness to collaborate with the Within team to advance the future of VR fitness. The FTC’s decision to withdraw represents a notable setback for the agency under the leadership of Lina Khan, a vocal critic of Big Tech and an esteemed antitrust scholar.

Future Challenges

The FTC faced a significant challenge in December when it filed an antitrust complaint to block Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard. The agency raised concerns about Microsoft’s potential to harm competition by manipulating pricing, degrading game quality, or restricting access to content. This case highlights the ongoing efforts of antitrust regulators to address consolidation and competition issues in the technology industry.