FTC lowers bid to block Meta’s acquisition of Within

The Federal Trade Commission has stopped trying to stop Meta from buying VR company Inside. According to Bloomberg and The Wall Street Journalthe agency voted to drop its administrative case against the company weeks after a federal court denied its request for a preliminary injunction to block the takeover.

The FTC originally filed antitrust charges in federal court and its own court last year in an effort to prevent Meta from snapping up the company that developed the virtual reality workout app Supernatural. At the time, the commission accused Meta of “trying to buy its way to the top … instead of getting it on the merits.” It says the company has the resources to enter the “VR fitness market by building its own app” and doing so will increase consumer choice and innovation. By buying Inside, the FTC said Meta could prevent “future innovation and competitive advantage.”

US District Judge Edward Davila, who presided over the federal case, ruled in Meta’s favor. While he reportedly agreed that mergers that could harm competition in the future should be blocked, he decided that the FTC failed to provide sufficient evidence showing how the Within acquisition would harm the market. He also said that while Meta has a lot of resources, it “does not have a viable way to enter the relevant market other than acquisition.”

Technically, Davila’s ruling has no direct effect on the administrative case. as The Journal notes, however, that antitrust officials have previously dropped administrative charges when a federal court refused an injunction. Now Meta can be confident that when it completes the acquisition of Inside on February 8th, the deal is truly final.

“We’re excited that the Within team has joined Meta, and we’re excited to partner with this talented team to bring the future of VR fitness to life,” a Meta spokesperson told Engadget.

The FTC’s withdrawal represents one of the most significant defeats under the leadership of Lina Khan, who is known as a prominent critic of Big Tech and a leading antitrust scholar. Last December, the agency faced an even bigger challenge than this when it filed an antitrust complaint to block Microsoft’s planned $68.7 billion takeover of Activision Blizzard. “Microsoft has the means and motive to harm competition by manipulating Activision’s prices, lowering Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withhold content from competitors entirely, resulting in harm to consumers,” the FTC said.

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