The Federal Trade Commission voted to end its investigation into Meta Platforms’ purchase of virtual reality startup Inside Unlimited by withdrawing an antitrust complaint.
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.
In a statement, a representative for Meta said, “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.”
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. A similar argument used by the FTC to oppose Microsoft’s proposed acquisition of Activision Blizzard is that doing so would give the dominant platform an advantage in the rapidly growing cloud-gaming business.
The FTC claims that although they lost the lawsuit, it wasn’t all bad: The agency’s idea that mergers that don’t immediately harm competition but have the potential to do so in the future should be barred was recognised in Davila’s ruling.
Democratic commission member Rebecca Kelly Slaughter spoke about Davila’s choice on Friday at a conference in Arlington, Virginia, “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.”
