The Federal Trade Commission has given up trying to stop Meta from buying virtual reality company Within. According Bloomberg and The Wall Street Journalthe agency voted to drop its administrative case against the company a few weeks after a federal court denied its request for a preliminary injunction to block the acquisition.
The FTC originally filed antitrust lawsuits in federal court and its domestic court last year in an effort to prevent Meta from taking over the company that developed the virtual reality fitness app Supernatural. At the time, the commission accused Meta of “trying to buy its way to the top…rather than earning it on the merits.” He said the company had the resources to enter “the VR fitness market by building its own app” and doing so would increase consumer choice and innovation. By purchasing Within, the FTC claimed that Meta would stifle “future innovation and competitive rivalry.”
US District Judge Edward Dávila, who oversaw the federal case, ruled in Meta’s favor. While he supposedly agreed that mergers that could harm competition in the future should be blocked, he decided that the FTC did not offer sufficient evidence to show how the Within acquisition would be detrimental to the market. He also said that while Meta has vast resources, it “did not have the feasible means available to enter the relevant market other than through acquisition.”
Technically, Dávila’s ruling did not have a direct effect on the administrative case. As The newspaper It notes, however, that antitrust officials have previously withdrawn administrative lawsuits if the federal court denies an injunction. Now Meta can be sure that when he completed the acquisition of Within on February 8, the deal was truly final.
“We are excited that the Within team has joined Meta, and we look forward to partnering with this talented group to bring the future of VR fitness to life,” a Meta spokesperson told Engadget.
The FTC’s withdrawal represents one of its most significant losses under the leadership of Lina Khan, who is known as a prominent critic of Big Tech and a leading antitrust scholar. In December, the agency took on an even bigger challenge than this when it filed an antitrust complaint to block Microsoft’s planned acquisition of Activision Blizzard for $68.7 billion. “Microsoft would have both the means and the reason to harm competition by manipulating Activision’s prices, degrading Activision’s game quality or player experience on rival game consoles and services, changing the terms and time of access to the Activision’s content, or withholding competitors’ content entirely, which would result in detriment to consumers,” the FTC said.
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