The US Judge Denied The FTC's Request, Giving The Meta An Important Victory
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U.S. District Judge Edward Davila in San Jose, California, ruled on the application last Tuesday, but did not make his decision public at the time. People familiar with the verdict told The Wall Street Journal that the judge denied the FTC's request, giving the Meta and its chief executive Mark Zuckerberg an important victory.
Court ruling
The FTC sought an injunction blocking Meta from buying Within, which makes a popular virtual reality fitness app called Supernatural, arguing that the deal would weaken competition. By court decision, Meta Platforms got permission to acquire a virtual reality start-up.
The ruling, which was initially sealed and released late Friday, rejected the FTC's arguments as to why Meta's acquisition of Within Unlimited was anti-competitive. But the judge sided with the FTC on some legal and factual arguments.
Judge Davil's now public ruling is based on the finding that Meta would have difficulty competing with Within. Although the judge allowed the deal, he ruled in favor of the FTC on certain points of law and fact. Judge Davila agreed with the FTC that virtual reality fitness products are a separate market.
A Meta spokesperson said the company was pleased with the ruling and looked forward to closing the Within deal quickly.
Important transaction
Meta has long been a dominant player in the virtual reality space, and Meta has long been a dominant player in the virtual reality space.
While Within is a relatively small company, the deal was seen as important to Mr. Zuckerberg's strategy of focusing on metaverses or virtual worlds, leading to Facebook's rebranding to Meta in October 2021.
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FTC vs. Meta
The Federal Trade Commission sought to block Meta Platforms Inc from acquiring Within Unlimited Inc. and its dedicated virtual reality fitness app, Supernatural. In July, when the FTC sued to block the Within deal, it accused Meta of trying to buy its way to the top of the virtual reality fitness market rather than competing on merit. According to the FTC, Meta is already a key player at every level of the virtual reality sector.The FTC claims that Meta and CEO Mark Zuckerberg plan to expand Meta's virtual reality empire by acquiring fitness apps, which would reduce competition in the market and violate antitrust laws.
A December trial to decide if Meta could go forward with the relatively small deal was seen as a test of the FTC's bid to head off what it sees as a repeat of the company acquiring small upcoming would-be rivals to dominate a market, this time in the nascent virtual and augmented reality markets.
The FTC may still challenge the Meta-Within Transaction by filing an appeal with the Ninth Circuit Court of Appeals or through administrative proceedings before the FTC's internal tribunal.
Meta shere price
The new year is favorable for Meta shares so far. Since the last week of trading in 2022, the stock has been on the rise, bouncing off levels below 100.
Meta shares surged to 188.77 in February, but recently fell to 185.19. Despite the decline, Meta shares remain at high levels that were last seen more than half a year ago.
Source: wsj.com, finance.yahoo.com
