FTC backs down over Meta's acquisition of VR biz Within
Meta said it plans to close deal soon
The Federal Trade Commission will not appeal a court decision approving Meta's acquisition of virtual reality fitness biz Within, paving the way for the deal to finally close.
Meta has reoriented its business around alternate realities as it scrambles to build the metaverse, an immersive platform where users can meet and socialize with each other in a virtual environment. Although derided by some, the social network is putting its money where its mouth is with a string of acquisitions.
In the last three years, it has gobbled up at least nine VR app studios, according to court documents [PDF]. But the FTC decided to draw the line when Meta announced it was going after Within, the makers of a VR fitness app Supernatural. In July 2022, the FTC sued Meta in an attempt to block the deal, claiming the acquisition would harm competition and consumers.
"The agency alleges that Meta's proposed acquisition of Within would harm competition and dampen innovation in the US markets for fitness and dedicated-fitness VR apps," it said.
Judge Edward Davila at the Northern District Court of California, however, disagreed and rejected the FTC's request for a preliminary injunction. Davila said the FTC failed to provide substantial evidence proving that Meta's acquisition of Within would dampen innovation or competition amongst rival companies.
"The Court finds that the objective evidence does not support a reasonable probability that firms in the relevant market perceived Meta as a potential entrant," the ruling said. "Even if it did, the Court finds that there is no direct or circumstantial evidence to suggest that Meta's presence did in fact temper oligopolistic behavior or result in any other procompetitive benefits."
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The FTC has since decided not to appeal Davila's decision, but may still try to pursue the case before an administrative law judge in a hearing set for 13 February.
"We are pleased that the Court has denied the FTC's motion to block our acquisition of Within," a Meta spokesperson told The Register in a statement. This deal will bring pro-competitive benefits to the ecosystem and spur innovation that will benefit people, developers, and the VR space more broadly. We look forward to closing the transaction soon."
Lina Khan, who was sworn in as the FTC's Chair in June 2021, has promised to take a tough antitrust stance and crack down on Big Tech. Under Khan, the commission has also sued Microsoft's $42 billion bid for Activision. The acquisition is also under investigation by the Competition and Markets Authority in the UK. ®