Meta acquisition of Within reportedly approved by court in loss for FTC
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., left, arrives at federal court in San Jose, California, US, on Tuesday, Dec. 20, 2022.
David Paul Morris | Bloomberg | Getty Images
Facebook-owner Meta will be permitted to buy Within Unlimited, the maker of virtual reality fitness app Supernatural, Bloomberg, The Wall Street Journal and The New York Times reported, citing people familiar with the matter as the California district court judge’s decision remained sealed as of Wednesday.
Shares of Meta were slightly positive on Wednesday afternoon.
The reported decision would be a significant defeat for the Federal Trade Commission, which under progressive Chair Lina Khan has promised to take on more risky cases and seek to be forward-thinking in the enforcement of mergers with companies that the agency believes could evolve into significant competitive threats.
The FTC could still appeal the decision and may also still decide to go through with in-house administrative proceeding on the merger. The agency filed an emergency motion on Tuesday seeking to stop Meta from consummating the merger for another week, giving it time to figure out the next steps.
Bloomberg and the Times reported that the judge granted a temporary restraining order to prevent Meta from closing the transaction for that period of time.
The FTC sued to block the merger in July, arguing Meta was using the deal “to buy its way to the top,” rather than compete on its own merits, Bureau of Competition Deputy Director John Newman said in a statement at the time.
The lawsuit made good on Khan’s vision of bringing challenging cases that seek to push the bounds of antitrust law. In a 2021 memo to agency staff, Khan said the FTC should be “forward-looking” in its enforcement actions and pay close attention to “next-generation technologies, innovations, and nascent industries across sectors.”
The agency, which is also litigating a separate monopolization case against Meta, argued that the VR-dedicated fitness app market would decline if the company was allowed to buy Within due to “the mere possibility [that] Meta’s entry has likely influenced competition” in the market.
A Meta spokesperson said in a statement at the time the case was “based on ideology and speculation, not evidence. The idea that this acquisition would lead to anticompetitive outcomes in a dynamic space with as much entry and growth as online and connected fitness is simply not credible.”
“In respecting the court’s order, the FTC is not able to comment at this time,” an FTC spokesperson said in a statement Wednesday. A Meta spokesperson declined to comment.
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