The FTC’s silver lining in Meta court victory to acquire VR app developer Within

MLex Market Insight

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4.9 • 9 Ratings

🗓️ 28 February 2023

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

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Summary

On paper, Meta won its court case against the US Federal Trade Commission fair and square, allowing it to acquire Within, a software company that develops apps for virtual-reality devices. Yet the outcome could have been worse for the US antitrust enforcer: Meta failed in its attempt to convince the judge that the FTC had used “dead letter” law; the tech giant also fell short in its claim that the relevant market for VR fitness apps was particularly competitive. Yet the FTC’s failure to provide evidence to prove the counterfactual — that Meta’s “Operation Twinkie” would have seen the company develop its own VR fitness app — is likely to prompt some soul-searching.

Transcript

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0:00.0	Welcome back to M-Lex's podcast, the third and last instalment of our special series dealing with the United States Federal Trade Commission.
0:18.7	I'm James Panicki, M-Lexis Asia Pacific Senior Editor,
0:21.9	coming to you from the LexisNexis offices in Melbourne, Australia. It's great to see you again.
0:27.4	Now, our subscribers would be all too familiar with our coverage of an interesting acquisition,
0:32.5	Meta's Play for Within, a software company that develops apps for VR devices, with VR being virtual reality.
0:41.1	And there's one product in particular that's of interest here, the VR workout game Supernatural.
0:46.6	The deal and the FTC's attempts to block it are of particular interest to us.
0:51.6	Why is that?
0:52.5	Well, there are a number of very sensitive issues at play here,
0:56.2	including the ability of antitrust enforcers to argue against a deal, not because there are
1:01.7	overlapsed today, but because of competition concerns that might arise later. Now, the FTC was
1:07.9	ultimately unsuccessful in blocking the deal, and we now know that the agency isn't willing to pursue an administrative legal challenge.
1:16.3	Yet these outcomes have a lot to tell us about what lies ahead.
1:20.1	To walk us through the meta within deal, we're joined now from our offices in San Francisco by Mike Acton, an Mnlex senior correspondent, who has written
1:28.9	a very fine piece of analysis. So Mike Meta, of course, has made a big bet on the Metaverse,
1:35.2	as we all know, and I suppose that is ostensibly why Facebook decided to change its parent
1:40.2	company's name to Meta. But first maybe explain to us what within and supernatural actually
1:47.2	are and how they fit into this Meta vision. Yes, so Meta is taking a big bet on the Metaverse
1:53.9	last year. It reported that it made a $14 billion operating loss on reality Labs, which is its division that focuses on the
2:04.4	VR sector. So what's supernatural? It's a fitness app, a very popular one at that that is available
2:11.7	on the VR app goggles, which Meta offers the Quest headsets.
2:18.3	So it's important to think about this space as a sort of nascent market, and the idea is that
	...

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