The Federal Trade Commission’s first major test in court against Big Tech under its crusading Chair Lina Khan begins in a Silicon Valley courtroom on Thursday in an attempt to block Meta Platforms Inc.’s $300 million acquisition of VR fitness app maker Within. The three-week trial in San Jose, Calif., is likely to showcase an intriguing look at the agency’s ability to stifle alleged anticompetitive conduct using largely untested legal theories at a time when Congress is sitting on tech antitrust legislation.
The FTC claims Facebook parent company Meta
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will illegally extend its market power into the nascent metaverse market and that Meta “had the intentions to enter — and thus was a reasonably probable entrant into — the VR Dedicated Fitness App market,” according to a court filing. A cornerstone of the FTC’s strategy is the potential competition theory — in essence, Facebook would have attempted to offer its own VR fitness app if not for the acquisition of Within. FTC initially sued Meta to block the deal in July. [Separately, the agency is trying to unwind then-Facebook’s purchases of Instagram and WhatsApp in 2012 and 2014, respectively.] Conversely, Meta asserts “these ideas never proceeded beyond the discussion stage, never received approval from any senior manager, and were all discarded as impractical for various reasons,” in its filing. Meta, which is challenging the commission’s decision to target a narrow market, insists it never intended to dive into the metaverse on its own, hence the Within acquisition. A star-studded lineup of witnesses is expected during the trial, led by Meta Chief Executive Mark Zuckerberg, who is pivoting the company into a metaverse force; Meta Chief Te …