FTC Sues to Block Meta’s Bid to Buy Virtual Reality Firm
Using a Twitter post, Meta Platforms Inc. learned of a suit being filed against the company over a smaller acquisition.
A person familiar with the matter said that Facebook’s parent company had provided hundreds of pages of documents and data to the Federal Trade Commission before it could reach Unlimited, a virtual reality fitness app maker, as routine exposure. According to the people, the regulator did not send its legal complaint to the company when it suggested it would challenge the agreement.
Upon seeing the tweet, Meta checked the court docket, the people said. Companies usually have the chance to meet with the FTC commissioners and argue their issues before they file a complaint; the FTC informs them by phone and by email minutes before the complaint is filed.
FTC Chair Lina Khan’s adversarial stance is evident in the challenge and lack of warning. Despite criticism that the agent stood by as industry giants like Meta snatched up promising rivals, Khan is a progressive antitrust advocate appointed by former president Joe Biden to bounce the agency.
Meta and directors were not sworn to testify about the agreement before the July 27 legal challenge, a common practice in lawsuits. The agreement was large enough to need a regulatory review and antitrust review by Meta. Meta and the FTC communicated similarly for past acquisitions that had no objections, the people said.
According to the FTC, Meta and the agent spoke with each commissioner before filing the complaint, and Meta spoke with each commissioner about the case. Following the complaint’s filing, the agent said it sent it to Meta. According to the agency, the information about Meta’s discussions with it is nonpublic.
In a statement, Meta reiterated its commitment to busily defending the agreement in court. The suit’s disclosure was not further discussed by Meta.
This follows the FTC’s unusual move of overruling her staff in the decision to bring the case; it’s the first time the FTC has tried to prevent Meta’s takeover; it uses a little-used argument against an agreement in a new industry, and it was the first time the FTC has taken this action.
The FTC debated Meta’s VR agreement in more detail
A new market often referred to as “nascent competition,” will be destroyed if Meta — the creator of the most widely used virtual reality headset, Oculus — is stopped. Because it is difficult to prove an agreement would dampen the potential of a young industry, the agent rarely sues under that legal theory. The FTC lost its last issue about sterilization technology in 2015, which involved sterilization technology.
The goal, said Neil Chilson, a former FTC director working for Stand Together, a philanthropic organization owned by billionaire Charles Koch, is more about creating a splash than establishing lasting legal authority. It would be much better to push the boundaries if they wanted to.”
According to Bloomberg earlier, FTC staff members reviewing the agreement recommended filing a lawsuit. The complaint was handled by Khan’s staff, who contacted Meta with more questions before the July 31 deadline.
As reported by Bloomberg, Alvaro Bedoya, the newest FTC commissioner, met with Khan’s office multiple times about the agreement. Several of Khan’s more aggressive antitrust ideas were stymied by the FTC’s Republican commissioners before Bedoya came on board. In the fight against Meta, Bedoya’s vote would be crucial.
The first competition was won by Khan thanks to Bedoya. A 2020 House report on tech company acquisitions reports that it passed on more than 100 accounts over a decade.
A major part of Meta’s strategy is to penetrate the metaverse, an alternate virtual world that allows users to shop, work and interact with friends.
It alleged that the acquisition would discourage Meta from using its existing resources to develop its virtual fitness giving, and it’s Supernatural app would compete with Meta’s Beat Saber, a VR rhythm game. Due to Meta controlling the market and eliminating the incentive for others to participate, the Federal Trade Commission argued the agreement decreased potential competition.
To win its antitrust suit against Meta, the Federal Trade Commission will need to persuade a federal judge in California in December.
According to Consumer Technology Association President Gary Shapiro, Meta is between 1,500 consumer technology companies represented by the group. The FTC’s legal theory is weak, according to Shapiro, a lawyer, and registered lobbyist.
Shapiro said he had never commented on an FTC lawsuit before due to its policy change, unfairness, and negative impact on new investment.
FTC Sues to Block Meta’s Bid to Buy Virtual Reality Firm
Using a Twitter post, Meta Platforms Inc. learned of a suit being filed against the company over a smaller acquisition.
A person familiar with the matter said that Facebook’s parent company had provided hundreds of pages of documents and data to the Federal Trade Commission before it could reach Unlimited, a virtual reality fitness app maker, as routine exposure. According to the people, the regulator did not send its legal complaint to the company when it suggested it would challenge the agreement.
Upon seeing the tweet, Meta checked the court docket, the people said. Companies usually have the opportunity to meet with the FTC commissioners and argue their issues before they file a complaint; the FTC informs them by phone and by email minutes before the complaint is filed.
FTC Chair Lina Khan’s adversarial stance is evident in the challenge and lack of warning. Despite criticism that the agent stood by as industry giants like Meta snatched up promising rivals, Khan is a progressive antitrust advocate appointed by former president Joe Biden to shake up the agency.
Meta and directors were not sworn to testify about the agreement before the July 27 legal challenge, a common practice in lawsuits. The agreement was large enough to need a regulatory review and antitrust review by Meta. Meta and the FTC communicated similarly for past acquisitions that had no objections, the people said.
According to the FTC, Meta and the agent spoke with each commissioner before filing the complaint, and Meta spoke with each commissioner. Following the complaint’s filing, the agent said it sent it to Meta. According to the agency, the information about Meta’s discussions with it is nonpublic.
In a statement, Meta reiterated its commitment to busily defending the agreement in court. The suit’s disclosure was not further discussed by Meta.
This follows the FTC’s unusual move of overruling her staff in the decision to bring it’s the first time the FTC has tried to prevent Meta’s takeover; it uses a little-used argument against an agreement in a new industry, and it was the first time the FTC has taken this action.
The FTC debated Meta’s VR agreement in more detail
A new market often referred to as “nascent competition,” will be destroyed if Meta — the creator of the most widely used virtual reality headset, Oculus — is stopped. Because it is difficult to prove an agreement would dampen the potential of a young industry, the agent rarely sues under that legal theory. The FTC lost its last issue about sterilization technology in 2015, which involved sterilization technology.
The goal, said Neil Chilson, a former FTC director working for Stand Together, a philanthropic organization owned by billionaire Charles Koch, is more about creating a splash than establishing lasting legal authority. It would be much better to push the boundaries if they wanted to.”
According to Bloomberg earlier, FTC staff members reviewing the agreement recommended filing a lawsuit. The complaint was handled by Khan’s staff, who contacted Meta with more questions before the July 31 deadline.
As reported by Bloomberg, Alvaro Bedoya, the newest FTC commissioner, met with Khan’s office multiple times about the agreement. Several of Khan’s more aggressive antitrust ideas were stymied by the FTC’s Republican commissioners before Bedoya came on board. In the fight against Meta, Bedoya’s vote would be crucial.
The first competition was won by Khan thanks to Bedoya. A 2020 House report on tech company acquisitions reports that it passed on more than 100 accounts over a decade.
A major part of Meta’s strategy is to penetrate the metaverse, an alternate virtual world that allows users to shop, work and interact with friends.
It alleged that the acquisition would discourage Meta from using its existing resources to develop its virtual fitness giving, and it’s Supernatural app would compete with Meta’s Beat Saber, a VR rhythm game. Due to Meta controlling the market and eliminating the incentive for others to participate, the FTC argued the agreement decreased potential competition.
To win its antitrust suit against Meta, the FTC will need to persuade a federal judge in California in December.
According to Consumer Technology Association President Gary Shapiro, Meta is between 1,500 consumer technology companies represented by the group. The FTC’s legal theory is weak, according to Shapiro, a lawyer, and registered lobbyist.
Shapiro said he had never commented on an FTC lawsuit before due to its policy change, unfairness, and negative impact on new investment.
edited and proofread by nikita sharma
