Meta notches win as FTC drops challenge to virtual-reality deal

The FTC had the option of pursuing an unwinding of the transaction in administrative court even though the judge's decision permitted Meta to seal the sale on Feb 10

Tech News
26. Feb 2023
Meta notches win as FTC drops challenge to virtual-reality deal

By voting to drop its antitrust lawsuit opposing Meta Platforms Inc.'s acquisition of virtual reality firm Inside Unlimited, the Federal Trade Commission effectively ended its investigation.

Last year, the FTC filed two lawsuits—one in federal court and the other in its internal court—to try to stop the deal. After a trial in December in a federal court in San Jose, US District Judge Edward Davila ruled in favour of Meta, concluding that the FTC had not shown sufficient evidence to establish that the acquisition would impair competition in the emerging virtual reality sector.

This month, the FTC decided not to challenge Davila's ruling and put the administrative matter on hold while it thought about its next move. Notwithstanding the fact that the judge's decision permitted Meta to complete the transaction on February 10, the FTC might have pursued its claim in administrative court and sought to annul the sale. But, the FTC decided to drop the lawsuit and end the matter on Friday.

“We’re excited that the Within team has joined Meta, and we’re eager to partner with this talented group in bringing the future of VR fitness to life,” a Meta spokesperson said in a statement.

President Joseph Biden selected FTC Chair Lina Khan to reenergize antitrust enforcement, and this judgement signals her first significant setback.

Because to their potential to soon dominate emerging markets, Khan has adopted a more aggressive approach to mergers than her predecessors and increased the agency's attention on technological behemoths. The FTC objected to Microsoft Corp.'s plan to acquire Activision Blizzard Inc. on the same grounds that doing so would give the company an advantage in the rapidly growing cloud gaming business.

The FTC asserts that even though it lost the case, it wasn't all negative because Davila's ruling acknowledged the agency's notion that mergers that don't immediately harm competition but may in the future should be prohibited.

Rebecca Kelly Slaughter, a Democratic member of the commission, praised Davila's ruling at a conference in Arlington, Virginia, on Friday. "The judge sided with the FTC on basically every question of law and laid out a very clear opinion that said the way we were interpreting the law was correct," she said.


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