In Manatt Antitrust Partner David Reichenberg’s latest Forbes column, he discussed the Federal Trade Commission (FTC) challenge to Meta’s acquisition of VR-App builder Within and evaluated the FTC’s claim that there is cross-platform competition amongst similar Apps.
Reichenberg explained how the FTC filed a suit against Meta on the grounds that a fitness-focused VR App called Supernatural competes with Meta-owned App Beat Saber. Because the FTC’s strategy is “very risky,” the non-politically appointed FTC staff economists and lawyers who investigated this deal recommended against challenging the transaction. Yet Biden-appointed FTC chair Lina Khan overruled FTC staff, which, according to Reichenberg, “begs the question: was this suit filed because of a true competition concern in the VR space, which is still in its early stages, or because Chair Khan believed it had to be done politically as a matter of policy.” Reichenberg warned entrepreneurs that, although enforcement decisions are typically informed by market and competitive facts, the FTC may base their decisions on political motivations as well.
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