Toni Dimaano Tech 02.07.2023 01:Feb AM EST

FTC Refuses To Appeal Defeat In Antitrust Battle With Facebook Parent Meta

The Federal Trade Commission decided not to appeal the court decision that denied its request to stop Facebook and parent company Meta from buying VR fitness business Within.

The decision by the regulator gives Meta a big victory and raises new questions about the agency's ability to win similar antitrust cases intended to check Big Tech's market dominance.

FTC Has Not Provided Details Regarding The Decision

The FTC's two-year campaign to stop the acquisition of Meta was practically over when a spokeswoman for the agency announced the decision during a news conference on Monday afternoon.

The representative declined to give any precise information about its choice but expressed optimism that their legal complaint addressed legitimate antitrust issues that might come up in subsequent cases.

Gizmodo writes that despite the setback, the FTC and legal experts claimed that the agency might still be able to battle for upcoming antitrust actions.

After federal judge Edward Davila's decision to dismiss the FTC's effort was made public, the FTC decided not to appeal.

The FTC argued in its complaint that Meta's proposed acquisition would eliminate VR competition and put the business on the path to gaining a VR monopoly.

It is important to note that Meta is currently considered as the world's largest manufacturer of consumer VR headsets.

Davila agreed with the FTC on a few legal issues, but he could not convince himself that Meta would have chosen to enter the VR fitness app market had it not succeeded in acquiring Within.

"Though Meta boasts considerable financial and VR engineering resources, it did not possess the capabilities unique to VR dedicated fitness apps, specifically fitness content creation and studio production facilities," Davilla wrote.

Meta, which argued that Davilla's acquisition would actually promote competition and be beneficial for both VR consumers and developers, immediately praised Davilla's decision.

"This deal will bring pro-competitive benefits to the ecosystem and spur innovation that will benefit people, developers, and the VR space more broadly. We look forward to closing the transaction soon," a Meta spokesperson says.

In 2021, Meta announced its plans to purchase Within Unlimited as part of its significant investment in immersive virtual worlds, sometimes known as metaverses.

According to The Wall Street Journal, this strategic change caused Facebook to become known as Meta in 2021.

FTC Remains Confident In Its Pursuit Against Other Tech Companies

The FTC said it remained confident in its ability to successfully pursue future proceedings against other digital giants despite the court's decision dealing it a devastating blow.

In addition to that, the judge agreed with the FTC's assertions that VR fitness items are a separate market, Gizmodo reports.

The judge also concurred that the FTC had a solid legal foundation for its assertions that Meta's acquisition may impair competition.

Lee Hepner, Legal Counsel for the American Economic Liberties Project, backed up the FTC's optimism by claiming that the agency made a wise and calculated decision by choosing not to appeal.

"A reviewing court would be deferential to Judge Davila's findings of fact, and it's not worth it for the FTC to risk losing their legal wins on appeal," Hepner claims.

Hepner continued by saying that the case "vindicates" the FTC and DOJ's declared strategy of presenting contentious real-world cases in order to promote legal ideas.