FTC drops meta-antitrust case and inflicts major defeat on Lina Khan
The Federal Trade Commission voted to drop an antitrust complaint against Meta Platforms Inc.’s purchase of virtual reality startup Within Unlimited, officially closing the agency’s case.
The FTC sued last year to block the deal, filing dual complaints in federal court and its internal court. After a December trial in federal court in San Jose, U.S. District Judge Edward Davila ruled in favor of Meta, saying the FTC’s ruling did not provide sufficient evidence that the acquisition would harm competition in the burgeoning virtual reality industry.
The FTC decided not to appeal Davila’s decision this month, pausing the administrative case while it considers next steps. Although the judge’s ruling allowed Meta to close the transaction on February 10, the FTC could have pursued its case in administrative court and attempted to reverse the transaction. But on Friday, the FTC voted to withdraw the complaint and close the case.
“We’re excited that the Within team has joined Meta, and we’re excited to work with this talented group to bring the future of VR fitness to life,” a Meta spokesperson said in a statement.
The decision marks the first major loss for FTC Chair Lina Khan, who was appointed by President Joe Biden to revive antitrust enforcement.
Khan has taken a more aggressive approach to mergers than her predecessors, increasing the agency’s focus on tech giants for their potential to quickly dominate emerging markets. The FTC also has Microsoft Corp. proposed acquisition of Activision Blizzard Inc. was challenged on similar grounds – that approving the acquisition would give the dominant platform a head start in the burgeoning cloud gaming market.
The FTC claims that losing the case wasn’t just a bad thing: Davila’s decision recognized the agency’s theory that mergers that don’t directly affect competition but have the potential to do so in the future should be blocked.
“The judge sided with the FTC on virtually every legal issue and presented a very clear opinion that the way we interpreted the law was correct,” said Rebecca Kelly Slaughter, a Democratic member of the Commission, on Davila’s decision at a conference in Arlington, Virginia, on Friday.
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