Meta moves forward with acquisition of VR platform in unlimited time as FTC withdraws case

The Federal Trade Commission has voted to withdraw an antitrust complaint challenging Meta Platforms’ purchase of virtual reality startup Within Unlimited, officially closing the agency’s case.

The FTC sued to block the deal last year, filing a dual lawsuit in federal court and its domestic court. Following a December trial in federal court in San Jose, U.S. District Judge Edward Davila ruled in favor of Meta, ruling that the FTC had failed to provide enough evidence to prove that the acquisition would harm competition in the nascent virtual reality industry.

The FTC elected this month not to appeal Davila’s decision and put the administrative case on hold while it considers next steps. Although the judge’s decision allowed Meta to complete the deal on February 10, the FTC could have pursued its case in administrative court and sought to unwind the transaction. But on Friday, the FTC voted to withdraw the complaint and end the case.

“We are thrilled 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 said in a statement.

The move represents the first major loss for FTC Chair Lina Khan, who was appointed by President Joe Biden to reinvigorate antitrust enforcement.

Khan took a more aggressive approach to mergers than his predecessors and intensified the agency’s focus on tech giants because of their potential to quickly dominate emerging markets. The FTC also challenged Microsoft’s proposed acquisition of Activision Blizzard on similar grounds: to clear the acquisition would give the dominant platform a head start in the emerging cloud gaming market.

The FTC argues losing the case wasn’t so bad: Davila’s decision acknowledged the agency’s theory that mergers that don’t immediately harm competition but have the potential to future should be blocked.

“The judge sided with the FTC on virtually every issue of law and gave a very clear opinion that the way we were interpreting the law was correct,” said Rebecca Kelly Slaughter, a Democratic member of the commission. , about Davila’s decision during a press conference. conference in Arlington, Virginia on Friday.

© Thomson Reuters 2023