The Federal Trade Commission (FTC) has dropped its administrative case against Meta’s acquisition of virtual reality (VR) company Within. The decision comes a few weeks after a federal court denied the FTC’s request for a preliminary injunction to block the acquisition. The FTC filed antitrust lawsuits in federal and in-house courts last year to prevent Meta from acquiring Within, which developed the VR workout app Supernatural, accusing the company of “trying to buy its way to the top instead of earning it on the merits.” The FTC alleged that the acquisition would stifle “future innovation and competitive rivalry” and that Meta had the resources to enter the VR fitness market by building its own app.
US District Judge Edward Davila, who oversaw the federal case, ruled in favor of Meta, stating that the FTC failed to provide sufficient evidence showing how the Within acquisition would be detrimental to the market. Although Davila’s ruling did not have a direct effect on the administrative case, the FTC has dropped such lawsuits before when a federal court denies an injunction. With the FTC’s withdrawal, Meta’s acquisition of Within on February 8th is now final.
The FTC’s loss represents a significant setback under the leadership of Lina Khan, a prominent critic of Big Tech and a leading antitrust scholar. The agency filed an antitrust complaint in December to block Microsoft’s planned $68.7 billion takeover of Activision Blizzard, which it said would give Microsoft the means and motive to harm competition by manipulating pricing and game quality, among other things.
