US antitrust regulator abandons challenge to Meta's acquisition of virtual-reality startup: WSJ

Washington [US], February 25 : The Federal Trade Commission (FTC) has dropped its last remaining effort to block Meta Platforms' acquisition of a virtual-reality startup, handing a final victory to the Facebook parent, The Wall Street Journal reported.
The announcement that the agency was abandoning an administrative proceeding against the deal came less than a month after a federal judge denied the FTC's request for a court order halting Meta's purchase of Within Unlimited. That ruling by US District Judge Edward Davila didn't directly affect the parallel challenge brought by the FTC in its in-house administrative court, and it had been unclear if the agency would push forward with the administrative case, according to WSJ.
US antitrust enforcers have often abandoned such administrative litigation once a federal judge denies a request for an injunction.
An FTC spokesman declined to comment. A Meta spokesman said, "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."
Both the administrative case and the federal court litigation have been closely watched because the FTC adopted an unusual theory of competitive harm focusing on potential future competition in a nascent industry, according to WSJ. The case is also widely seen as emblematic of FTC Chair Lina Khan's opposition to the expansion of big technology companies.
Within Unlimited firm makes a popular game called Supernatural, which lets users take virtual-reality fitness classes. Meta announced in 2021 that it was acquiring Within--the latest in a string of acquisitions that have made Meta a dominant player in the virtual-reality space.
Meta CEO Mark Zuckerberg has made a big bet on immersive virtual worlds, or metaverses, a strategic shift that led to the 2021 rebranding of Facebook as Meta.
In July, the FTC sued to block the Meta-Within deal, saying it would lessen competition in the market for virtual-reality fitness products. The antitrust lawsuit was the first under Khan against one of the "big four" technology companies: Meta, Alphabet, Apple and Amazon.com.
Historically, the FTC and Justice Department have challenged mergers by two major players in established industries. So the FTC's challenge to Meta buying a startup in a relatively new market was seen as an unusual approach and an important test case.
According to WSJ, the FTC alleged Meta had the resources to build a rival to Within's Supernatural, but instead of competing on the merits opted to buy its way to the top of the industry.
The agency said blocking the Meta-Within deal would ultimately lead to more competition, which in turn would foster innovation and benefit consumers. Even the perceived threat of Meta launching a rival to Within's Supernatural was leading to a more competitive industry, the FTC said.