The Federal Trade Commission voted to withdraw an antitrust complaint challenging Meta Platforms's purchase of virtual-reality startup Within Unlimited, officially closing the agency's case.
The FTC sued to block the deal last year, filing twin
complaints in federal court and its in-house court. Following a December trial
in a San Jose federal court, US District Judge Edward Davila found in favor of
Meta, ruling the FTC didn't offer enough evidence to prove that the acquisition
would harm competition in the nascent virtual-reality industry.
The FTC opted this month against appealing Davila's decision
and paused the administrative case while it considered next steps. Although the
judge's ruling allowed Meta to close the deal on February 10, the FTC could
have continued 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'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.
The decision represents the first major loss for FTC Chair
Lina Khan, who was appointed by President Joe Biden to reinvigorate antitrust
enforcement.
Khan has taken a more aggressive approach to mergers than
her predecessors and stepped up the agency's focus on technology giants because
of their potential to quickly dominate budding markets.
The FTC has also challenged Microsoft's proposed acquisition
of Activision Blizzard on similar grounds — that allowing the acquisition would
give the dominant platform a leg up in the emerging cloud-gaming market.
The FTC maintains that losing the case wasn't all bad:
Davila's decision recognized the agency's theory that mergers that don't
immediately hurt competition but have the potential to do so in the future
should be blocked.
“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,” Rebecca Kelly Slaughter, a Democratic member of the
commission, said of Davila's decision at a conference in Arlington, Virginia,
on Friday. © Reuters
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