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FTC drops bid to block Meta's acquisition of Within

A federal court previously denied the agency's request for a preliminary injunction.

Meta/Within

The Federal Trade Commission has given up on trying to stop Meta from purchasing VR company Within. According to Bloomberg and The Wall Street Journal, the agency has voted to drop its administrative case against the company a few weeks after a federal court denied its request for a preliminary injunction to block the acquisition.

The FTC originally filed antitrust lawsuits in federal court and its in-house 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 earning it on the merits." It said the company had the resources to enter "the VR fitness market by building its own app" and doing so would increase consumer choice and innovation. By buying Within, the FTC alleged Meta would stifle "future innovation and competitive rivalry."

US District Judge Edward Davila, who oversaw the federal case, ruled in favor of Meta. While he reportedly agreed that mergers that could potentially harm competition in the future should be blocked, he decided that the FTC failed to offer sufficient evidence showing how the Within acquisition would be detrimental to the market. He also said that while Meta has vast resources, it "did not have the available feasible means to enter the relevant market other than by acquisition."

Technically, Davila's ruling didn't have a direct effect on the administrative case. As The Journal notes, though, antitrust officials have previously dropped administrative lawsuits if the federal court denies an injunction. Now Meta can rest assured that when it completed its acquisition of Within on February 8th, the deal was truly final.

"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 told Engadget.

The FTC's withdrawal represents one of its most pertinent losses under the leadership of Lina Khan, who's known to be a prominent critic of Big Tech and a leading antitrust scholar. In December, the agency took on an even bigger challenge than this one when it filed an antitrust complaint to block Microsoft's planned $68.7 billion takeover of Activision Blizzard. "Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading 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 withholding content from competitors entirely, resulting in harm to consumers," the FTC said.