The Federal Trade Commission (FTC) has decided to end its antitrust dispute against Meta Platforms Inc.’s acquisition of virtual reality firm Within Limitless. Thus, it put an end to the agency’s investigation.
Last year, the FTC filed two complaints in federal court along with its own court to prevent the purchase. US District Judge Edward Davila ruled in favor of Meta during a trial in December in a federal court in San Jose. He concluded that the FTC didn’t present substantial proof to demonstrate that the purchase would undermine competition in the budding virtual reality sector.
Why did the FTC not proceed with the lawsuit?
This month, the FTC decided not to dispute Davila’s ruling and put the administrative matter on hold while it pondered its next move. The judge’s decision enabled Meta Platforms to finalize its purchase on February 10. But despite that, the FTC could have continued its claim in administrative court and tried to overturn the deal. However, the FTC decided to drop the lawsuit and stop the matter on Friday.
The verdict is the first significant setback for FTC Chair Lina Khan. President Joseph Biden selected her to re-energize antitrust enforcement.
Khan has adopted a more aggressive merger strategy than her predecessors. This is due to technological heavyweights’ potential to dominate emerging markets soon. Moreover, she sharpened the agency’s attention on these companies. For similar reasons, the FTC has also objected to Microsoft Corp’s planned acquisition of Activision Blizzard Inc. It asserted that approval of the deal would give the dominant platform an advantage in the burgeoning cloud-gaming sector.
The FTC contends that even though it lost the lawsuit, it wasn’t all negative. Davila’s ruling supported the agency’s notion that mergers that don’t immediately impair competition. However, they are likely to do so in the future and should be prohibited.
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