Meta wins fight to buy VR startup Within
A California judge allows Meta to complete its acquisition of virtual reality fitness startup Within despite an ongoing antitrust case by the Federal Trade Commission, according to an unsealed ruling. Wednesday, Bloomberg reported that the court denied the FTC’s request to block the deal, but with a one-week deadline that will give the FTC time to appeal. The orders were released on Tuesday and a hearing on the status of the case is scheduled for February 7.
The FTC filed a lawsuit in July 2022 to stop Meta’s acquisition of Within, which makes the popular VR app Supernatural. The agency argued that buying Meta would extend its dominance in the consumer VR market, where Meta has invested much of its resources in recent years. The commission pointed to Meta’s previous merger with the company behind beat the saber in 2019, claiming that the addition of Within would eliminate a “beneficial rivalry” between the two companies.
Meta fought the decision, but in December it agreed to delay its acquisition of Within until January 31 – although Meta CTO Andrew Bosworth told a hearing that the company could walk away from the deal if it ” is not concluded in a timely manner”.
“While Meta has considerable VR engineering and financial resources, it lacked the capabilities unique to VR-dedicated fitness applications, particularly fitness content creation and studio production facilities,” the company said. decision. “As a VR platform developer, Meta can enjoy many promising benefits of VR fitness growth without intervening in the VR fitness application market itself.”
The FTC has apparently faced internal disagreements over whether to intervene in the deal between Meta and Within, and its pursuit of the case contrasts sharply with several relatively smooth acquisitions of Meta (formerly Facebook), including its purchase of VR startup Oculus in 2014. compliance with court orders, the FTC is unable to comment at this time,” said FTC Director of Public Affairs Douglas Farrar. The edge in response to a request for comment.
“We are pleased that the Court has denied the FTC’s motion to block our acquisition of Within,” Meta spokesman Stephen Peters said in a statement to The edge. “This agreement will bring pro-competitive benefits to the ecosystem and drive innovation that will benefit people, developers, and the broader VR space. We look forward to closing the transaction soon.
If this week’s order goes through, it would represent a loss for agency chief and antitrust activist Lina Khan. The loss would come as the FTC battles to stop another gaming-related merger: Microsoft’s acquisition of Activision. The two cases have significant differences – in particular the small size of the VR market relative to the overall gaming industry, as well as the FTC’s choice to focus specifically on the fitness apps market. VR in the case of Within, and not about virtual reality or games in general. Still, the decision could signal an uphill battle to limit tech industry consolidation — despite persistent attempts to give antitrust watchdogs some teeth.
Updated February 4, 12:50 p.m. ET: Updated to add a copy of the unsealed file as well as a statement from a Meta spokesperson.