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FTC's Meta block could chill future media deals

Jul 28, 2022
Illustration of a frowning face made from the Meta logo

Illustration: Annelise Capossela/Axios

The FTC's attempt to block Meta's relatively small acquisition of a virtual reality fitness company is itself an attempt to send a message: Now that Lina Khan has her majority, the commission wants to reign in Big Tech.

Why it matters: Khan's majority and her approach to antitrust hang over all transactions that go through the agency, especially in the tech and media sector. Her stance comes just as the race to the metaverse begins.

Driving the news: The FTC sued to block Meta's acquisition of Within Unlimited on Wednesday on grounds that the company is "already a key player at each level of the virtual reality sector," per a release.

  • Were the deal to be blocked based on that argument, it would effectively make it impossible for Meta to gain the necessary scale to fulfill Mark Zuckerberg's lofty metaversal ambitions.

Between the lines: The FTC's long-promised-but-so-far-unfulfilled tougher stance on mergers has gained traction since Alvaro Bedoya's confirmation in May, which finally gave Khan a 3-2 majority.

  • Amazon's $8.45 billion MGM deal, which closed in March, is also being scrutinized as part of a revamped antitrust investigation.

What they're tweeting: "FTC going after Meta for buying VR games developers will be a very intriguing case. Is it not precisely what Microsoft and Sony (with Xbox and Playstation) have been doing for years? Was that anticompetitive?" tweeted the Financial Times' Dave Lee.

  • Platformer's Casey Newton responded: "It's going to be really weird if Facebook can't buy a small fitness app but Microsoft can buy Activision Blizzard for $68.7 billion."
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