The Meta-Within Merger Will Go Through As FTC Withdraws Antitrust Complaint
Will the same happen with Microsoft's buyout of Activision soon?
- FTC has dropped its bid to block Meta and Within’s merger.
- This news comes after a federal court rejected the regulator’s appeal for a preliminary injunction to block the deal.
- Sufficient evidence was also not present as the FTC failed to provide it.
- Xbox fans have renewed hope for the Microsoft-Activision deal after this news.
The FTC will no longer try to block Meta‘s acquisition of Within from happening as it has dropped its bid to block the deal. A federal court rejected the regulator’s appeal for a preliminary injunction to block the deal, resulting in this. Bloomberg first reported this news about the Federal Trade Commission in a paid article.
Initially, the FTC filed antitrust lawsuits to prevent this deal as Meta was trying to buy its way to the top. But, US Judge Edward Davila ruled in favor of Meta because the regulator couldn’t come up with enough evidence. The real killer, however, was the denial of this injunction which made the FTC drop this lawsuit.
In the first major loss for FTC Chair Lina Khan, the agency voted to withdraw an antitrust complaint challenging Meta's purchase of virtual-reality startup Within Unlimited https://t.co/vI0yru3anv
— Bloomberg (@business) February 24, 2023
Besides the CMA, the Federal Trade Commission has been the only other roadblock to the Microsoft-Activision merger. The US regulator has sued to block the acquisition from taking place. Lina Khan, a significant adversary of Big Tech, has been the force behind the regulator’s bid to block this merger.
However, now that she has lost a similar case related to Meta, Xbox fans can start to hope. Like the Microsoft-Activision deal, the FTC opposed Meta’s acquisition of Within because it was anti-competitive. According to the regulator, the VR player was trying to “buy its way to the top” instead of earning it.
Within developed the VR workout app called Supernatural, an immersive fitness game. Meta wanted to buy the company because of this app, but the FTC thinks it has the resources to build its own VR app. Furthermore, the regulator also said how this acquisition would smother innovation and rivalry.
Judge Edward Davila was assigned the case and agreed that mergers that hurt competition should not see the light of day. But, the judge did rule in favor of Meta in the end because the FTC did not come up with enough evidence. In addition, he said that Meta could not enter the relevant market without acquisition despite its resources.
Even with this, the disapproval of the injunction was the real nail in the coffin to block this deal from happening. While speaking to Engadget, a spokesperson from Meta 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.”
Courts squashing FTC’s bid to stop this merger from happening is also of keen interest to gamers. The regulator’s case to stop Microsoft from buying Activision is still ongoing. Lina Khan is at the center of this, and even though there were reports of a split vote, the FTC is holding firm.
The acquisition being anti-competitive is also the FTC’s bone to pick with this deal. But now that we have seen one major tech player squash FTC opposition, Microsoft could do the same.
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