The agency, which is made up of two Republicans and three Democrats including Chair Lina Khan, voted 3-2 to file the lawsuit in a federal court in California. If Meta is allowed to buy Within, the agency continued, competition in the VR-dedicated fitness app market will decay, because just "the mere possibility of Meta's entry has likely influenced competition" in the market. But it added that buying an existing app could dampen such innovation. In its press release, the FTC said if Meta were to create a "virtual reality dedicated fitness app market" on its own, it would increase consumer choice and innovation. While federal antitrust agencies reserve their right to sue to unwind an acquisition that they didn't previously try to stop, it's generally much harder to break apart two merged entities than prevent them from combining in the first place. The FTC's new lawsuit seeking to block the Within acquisition suggests the agency is trying to take bigger swings earlier on to prevent an even greater accumulation of power before a merger is allowed to close. When the monopolization case was first filed in 2020, Facebook's chief counsel said the FTC was looking for a "do-over" of its original reviews of the Instagram and WhatsApp mergers, which happened years earlier. Meta previously sought for that lawsuit to be dismissed, though it is still moving forward in a federal court after the judge allowed the FTC to revise its complaint. The FTC is already separately suing Meta for illegal monopolization of the personal social networking market, in which the agency charges that Meta used those two acquisitions to shut down nascent competitors to increase its own dominance. The lawsuit, which also names CEO and controlling shareholder Mark Zuckerberg as a defendant, echoes issues progressive critics have said the FTC should have raised in Facebook's acquisitions of Instagram and WhatsApp roughly a decade earlier. The company spokesperson added the agency's lawsuit sends a "chilling message to anyone who wishes to innovate in VR" and said Meta is "confident that our acquisition of Within will be good for people, developers, and the VR space." The idea that this acquisition would lead to anticompetitive outcomes in a dynamic space with as much entry and growth as online and connected fitness is simply not credible." "But Meta chose to buy market position instead of earning it on the merits. This is an illegal acquisition, and we will pursue all appropriate relief."Ī Meta spokesperson said in a statement the case "is based on ideology and speculation, not evidence. Meta's finance chief David Wehner blamed the company's results on the continuation of weak advertising demand, which he said was being driven by broader macroeconomic uncertainty."Meta already owns a best-selling virtual reality fitness app, and it had the capabilities to compete even more closely with Within's popular Supernatural app," Newman said. "Expect Meta's decline to continue until Meta can monetise the metaverse, and begin another Meta-reverse," Shah added. Sandberg, who has a net worth of US$1.6b, was the mastermind of the company's massive advertising business.īut her departure also comes at a time when Meta is attempting a risky move by investing billions to launch a suite of virtual reality metaverse products, which would take years to make a profit, according to analysts. When the news of chief operating officer Sheryl Sandberg's departure from the company, after 14 years working alongside Zuckerberg, broke in June it couldn't have come at a "worse time" for Meta, analysts said. Facebook-parent Meta reported that its quarterly revenue dropped year-over-year for the first time ever, as its profit plunged by more than a third.
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