Though Davila sided with the FTC on a handful of legal arguments, he was ultimately left unconvinced that Meta would have opted to enter the VR fitness app market if failed to acquire 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 in his ruling.
Davilla’s ruling drew immediate praise from Meta, which argued its acquisition would actually increase competition and be a boon for both VR consumer and developers. CEO Mark Zuckerberg provided testimony in proceedings leading up to the court’s decision.
“We are pleased that the Court has denied the FTC’s motion to block our acquisition of Within,” a Meta spokesperson said in a statement. “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.”
Meta did not immediately respond to Gizmodo’s request for comment.
FTC: Down, but not out
Though the court’s ruling deals a damaging blow to the FTC, the agency and a monopoly expert speaking to Gizmodo said they remained confident in its ability to effectively pursue future actions against other tech companies. For starters, the judge sided with the FTC’s claims that VR fitness products are their own distinct market. The judge also agreed that the FTC’s claims for its case, that Meta’s acquisition could worsen competition, were in fact built on a valid legal theory. Those smaller wins could help the FTC in future cases.
American Economic Liberties Project Legal Council Lee Hepner bolstered the FTC’s optimistic outlook telling Gizmodo the decision not to appeal is, “a smart and strategic move by the FTC.”
“The FTC largely achieved its objective of advancing the legal theory, and only lost on a narrow fact-specific determination,” Hepner said “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 went on to say the case “vindicates” the FTC and DOJ’s stated approach of bringing forward challenging real world cased to advancement legal theories.
“In that sense, this was a win for the FTC,” Hepner said.
