The FTC files to block Meta's acquisition of VR company Within, saying Meta “chose to buy” instead of compete, the first antitrust lawsuit filed under Lina Khan
Welcome to BIG, a newsletter on the politics of monopoly power. Lauren Feiner / CNBC : Facebook lawsuit delivers on FTC chair Lina Khan's progressive agenda Josh Sisco / Politico : Antitrust agency takes aim at the metaverse by suing Facebook Dave Karpf / The Future, Now and Then : Facebook might be in real trouble this time Usama Jawad / Neowin : Meta slams FTC for blocking its acquisition of Within Tweets: Rat King / @mikeisaac : BREAKING: FTC files injunction against Meta (Facebook) to prevent it from acquiring the Virtual Reality app “Within” @grimezsz : Concern abt Facebook monopolizing the “metaverse” only exists if ur in complete denial about the existence and quality of video games and wider gaming culture https://twitter.com/... @ftc : FTC seeks to block virtual reality giant Meta's acquisition of popular app creator Within: https://www.ftc.gov/... Aaron Levie / @levie : If the government blocks big tech companies from buying small startups in *nascent* markets, all that will happen is there will be fewer startups over time because investors can't underwrite the risk. This is bad for innovation, and ironically good for the big tech companies. Christine S. Wilson / @cswilsonftc : For those who have asked, yes, I was one of the two dissenting votes in this @FTC challenge. https://www.ftc.gov/... Margaret Harding McGill / @margarethmcgill : FTC voted 3-2 to move to block the deal https://twitter.com/... Kerry Flynn / @kerrymflynn : “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.” - @tim_bays https://www.axios.com/... Ron Knox / @ronmknox : 1. Hello. The FTC today sued Facebook to stop it from buying Within, a virtual reality company that Meta competes with head-to-head. The lawsuit shows that under the leadership of Lina Khan, the FTC is learning its lessons. A quick thread. Ben Bajarin / @benbajarin : The strategy for Meta here was due to all the best VR developers likely prioritizing whatever Apple does in the space, whenever that happens. https://twitter.com/... Benedict Evans / @benedictevans : The interesting problem with the FTC's thesis here is that FB is trying desperately to get a competitive VR ecosystem going. Blocking investment and indeed buyouts might not be the best regulatory response Richard Hoeg / @hoeglaw : Good freaking lord. If the FTC plans to simply block all “outsourced R&D” acquisitions, buckle up. I'm no fan of Meta, but this broad brush approach to anti-trust regulation is going to have *massive* downstream effects for virtually every tech-related industry. https://twitter.com/... Aaron Levie / @levie : This is totally unnecessary. VR is brand new, and there's really few other buyers for tech like this right now. https://twitter.com/... Elad Gil / @eladgil : Many fewer companies being founded all of a sudden The marginal founder is staying at MAMAA now instead (Meta, Alphabet, Microsoft, Apple, Amazon) Still lots of great founders starting things right now however. Average quality already higher then 6 months ago Chris Hoffman / @chrisbhoffman : I still can't understand why Meta's acquisition of Within is a big concern, but Microsoft buying Activision-Blizzard (on the heels of buying Bethesda, Mojang, and many more) is fine. https://twitter.com/... Rat King / @mikeisaac : no mincing words here https://www.nytimes.com/... https://twitter.com/... @joshconstine : Whoa. FTC files to stop Facebook's acquisition of Within, maker of VR fitness app Supernatural, because it “chose to buy” instead of compete! Blocking M&A of a small company, in a nascent category, outside the acquirer's core biz, endangers the whole venture model. https://twitter.com/... Nilay Patel / @reckless : Good. The only good tech acquisitions have been YouTube and PA Semi https://twitter.com/... @ronenv : @JoshConstine ugh. “why is facebook paying these people for their product instead of ripping them off?” is not what I want the government to be forcing Nilay Patel / @reckless : Competition is good and allowing companies to buy their nascent competitors is bad Benedict Evans / @benedictevans : The irony is that on the FTC's own numbers, acquisitions by big tech companies are a tiny % of startups and startup exists. That whole ‘big tech buys lots of startups to kill them!’ narrative was nonsense. https://www.ben-evans.com/... Anshel Sag / @anshelsag : @lucasmtny ... Because I'm fairly certain, that there was another party involved that caused a bidding war, and that other party has a history of working through the FTC to attack competitors or get what it wants. Adam Kovacevich / @adamkovac : 2. ABSURDLY NARROW MARKET DEFINITION (again): Just like the FTC's pending antitrust case against Meta, the case relies on an absurdly narrow market definition that overlooks the reality of competition between platforms. 5/ Anshel Sag / @anshelsag : @lucasmtny ... The FTC filed a lawsuit against Qualcomm in the last 3 days of the Obama admin and indirectly did Apple's bidding, making an extremely bad case and riding it as far as the FTC could even though most people agreed it was a pretty bad lawsuit to begin with. https://en.wikipedia.org/... @joshconstine : @RonenV Absolutely. So now Facebook's only option (given it's not great at inventing totally new things since 2006) is copying. This also spooks all investors of social startups. If there's no acquisition exit option, they can only fund startups that can IPO @econliberties : 3/ FB's strategy has always been to consolidate as much market power as possible. Their intention is clear; they rebranded themselves as Meta and began branding all VR/AR technology as part of the “Metaverse” hours before this acquisition. https://techcrunch.com/... Wagner James Au / @slhamlet : @MikeIsaac My take on this. Rec Room has about 3-5x more active users than Supernatural on Quest 2 alone & RR's user community can already create a “good enough” version of anything on that app. (Just like a Rec Room user created a version of Beat Saber years ago.) https://nwn.blogs.com/... Adam Kovacevich / @adamkovac : The FTC is supposed to be driven by facts and law, not politics and scoreboards. But again, Team Khan's leak to Capitol Forum tells all - it's not about the legal argument against the deal so much as the suit being “a meaningful blow” to Meta 3/ https://twitter.com/... Wagner James Au / @slhamlet : @MikeIsaac This is a really bizarre injunction, on first glance. Within has a tiny userbase, while the most active usage of its Quest headsets are on competing metaverse platforms Rec Room & VRChat — which have far, far, far more users than Meta's own Horizon. https://nwn.blogs.com/... Anshel Sag / @anshelsag : @lucasmtny ... I suspected a bidding war from the get-go. I've seen that Apple is extremely interested in VR fitness. That, coupled with how tightly integrated the Apple Watch already is in Supernatural, its a very logical fit. It also may explain why THIS is the merger that's getting scrutiny. Adam Kovacevich / @adamkovac : It all adds up to a portrait of a political singling out that the FTC is ultimately likely to lose on the facts and the law. 26/ Parker / @pt : Also no end of hilarious that Apple will dominate this market and the FTC is gonna make extra sure that happens. Who needs competition when Zuck let Trump win? https://twitter.com/... Lucas Matney / @lucasmtny : @auradeluxe @ballmatthew what i truly don't understand is how this deal could have been worth $400M (reported by a couple places not officially confirmed) this deal seems like it should have been like 5-10% of that max. What am i missing? Casey Newton / @caseynewton : I'm glad the FTC is scrutinizing tech giants' acquisitions more closely. But it doesn't feel like too much of an exaggeration to say that the injunction it's asking for in the Meta/Supernatural case could upend the tech industry https://www.platformer.news/ ... https://twitter.com/... Sohrab Ahmari / @sohrabahmari : This perfectly encapsulates why I increasingly worry that the “New Right” stuff is just culture-war noise-making, that the right remains structurally, and perhaps irredeemably, pro-big business. https://twitter.com/... @ftc : Agency alleges that Meta and CEO Mark Zuckerberg are attempting illegal acquisition to expand virtual reality empire. Barry Petchesky / @barry : VR is doomed because normal people don't wanna wear shit on their face. I don't know why companies don't grasp this. https://twitter.com/... Nilay Patel / @reckless : Meta's blog post about why the FTC is wrong to block the Supernatural deal contains this line which is very funny because this same company is also like “we are in a position to build The Matrix” ["Indeed, we looked into building a fitness-specific service and decided we simply weren't in a position to do so."] Matthew Ball / @ballmatthew : If one is concerned with who might own the metaverse, then we should force open app stores, sideloading, APIs, identity systems, etc., not fitness games with no meangfingful user base on an also tiny platform, with a money losing biz model. Instead help those contending w GAFAMMike Masnick / @mmasnick : Market definition will be fun in this lawsuit. Seems like a weird one to try to make a stand on. Even if you argue FB is dominant in social media... this acquisition seems totally disconnected from that. https://twitter.com/... Matt Stoller / @matthewstoller : This was a 3-2 vote. The GOP talks a big game about big tech, but when there's an actual Facebook merger on deck, @CSWilsonFTC and @FTCPhillips voted to help Zuckerberg. https://t.co/m6B9qA94SN Robert Scoble / @scobleizer : If this purchase is blocked that means Meta's fitness service will be decimated. Huge win for Apple. https://twitter.com/... Adam Kovacevich / @adamkovac : 1. POLITICS OVER LAW: Until just a few days ago, it was uncertain whether the suit would have the support of the FTC's newest Dem commr, Alvaro Bedoya. But Khan's allies leaked to put pressure on him, threatening “political difficulties” if he voted against the deal ⤵️ 2/ https://twitter.com/... @chrismessina : The metaverse doesn't even exist yet. https://t.co/2PRZNlfCWz Dave Lee / @daveleeft : Quite. Given Microsoft gleefully talked up the metaverse potential of Activision ... surely this is where Meta's defence begins. https://twitter.com/... Casey Newton / @caseynewton : 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 https://twitter.com/... Adam Kovacevich / @adamkovac : 🚨 NEW 🚨 : The FTC's lawsuit against Meta's Within (VR) deal is rooted more in politics than in the law. It will be long on headlines, but short on results. This spin from @linakhanFTC's staff to Capitol Forum tells you exactly the headlines she is seeking from this ⤵️ 1/ https://twitter.com/... Dave Lee / @daveleeft : 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? Dave Lee / @daveleeft : Wikipedia (sorry) lists at least 15 studios bought up by Xbox, including creators of its biggest hitters such as Halo and others. Then again, Halo was a commimssion, essentially, kinda. Maybe that's another distinction that could play a factor: Xbox moved in b4 game was a success Matthew Ball / @ballmatthew : I'm a public advocate for much greater tech regulation, inc. breakups, forced API exposure, etc. I struggle to see this one. Nearly all of Within's business is on Oculus, probs unprofitable, not a top title, Oculus is losing buckets + remains tiny + need exclusives to standout Steven Sinofsky / @stevesi : FTC Seeks to Block Virtual Reality Giant Meta's Acquisition of Popular App Creator Within https://www.ftc.gov/... // “virtual reality giant” is all you need to know about the politicization of oversight. Richard Hoeg / @hoeglaw : And for those wondering, on its face, this acquisition looks *FAR* more benign than Microsoft's acquisition of Activision. Investors in companies both big and small should definitely be clenching all across the board.
Concern abt Facebook monopolizing the “metaverse” only exists if ur in complete denial about the existence and quality of video games and wider gaming culture https://twitter.com/...
If the government blocks big tech companies from buying small startups in *nascent* markets, all that will happen is there will be fewer startups over time because investors can't underwrite the risk. This is bad for innovation, and ironically good for the big tech companies.
I still can't understand why Meta's acquisition of Within is a big concern, but Microsoft buying Activision-Blizzard (on the heels of buying Bethesda, Mojang, and many more) is fine. https://twitter.com/...
The strategy for Meta here was due to all the best VR developers likely prioritizing whatever Apple does in the space, whenever that happens. https://twitter.com/...
Good freaking lord. If the FTC plans to simply block all “outsourced R&D” acquisitions, buckle up. I'm no fan of Meta, but this broad brush approach to anti-trust regulation is going to have *massive* downstream effects for virtually every tech-related industry. https://twitter.c…
Many fewer companies being founded all of a sudden The marginal founder is staying at MAMAA now instead (Meta, Alphabet, Microsoft, Apple, Amazon) Still lots of great founders starting things right now however. Average quality already higher then 6 months ago
The interesting problem with the FTC's thesis here is that FB is trying desperately to get a competitive VR ecosystem going. Blocking investment and indeed buyouts might not be the best regulatory response
Whoa. FTC files to stop Facebook's acquisition of Within, maker of VR fitness app Supernatural, because it “chose to buy” instead of compete! Blocking M&A of a small company, in a nascent category, outside the acquirer's core biz, endangers the whole venture model. https://twitte…
Meta's blog post about why the FTC is wrong to block the Supernatural deal contains this line which is very funny because this same company is also like “we are in a position to build The Matrix” ["Indeed, we looked into building a fitness-specific service and decided we simply w…
If one is concerned with who might own the metaverse, then we should force open app stores, sideloading, APIs, identity systems, etc., not fitness games with no meangfingful user base on an also tiny platform, with a money losing biz model. Instead help those contending w GAFAM
3/ FB's strategy has always been to consolidate as much market power as possible. Their intention is clear; they rebranded themselves as Meta and began branding all VR/AR technology as part of the “Metaverse” hours before this acquisition. https://techcrunch.com/...
1. POLITICS OVER LAW: Until just a few days ago, it was uncertain whether the suit would have the support of the FTC's newest Dem commr, Alvaro Bedoya. But Khan's allies leaked to put pressure on him, threatening “political difficulties” if he voted against the deal ⤵️ 2/ https:/…
Market definition will be fun in this lawsuit. Seems like a weird one to try to make a stand on. Even if you argue FB is dominant in social media... this acquisition seems totally disconnected from that. https://twitter.com/...
@MikeIsaac My take on this. Rec Room has about 3-5x more active users than Supernatural on Quest 2 alone & RR's user community can already create a “good enough” version of anything on that app. (Just like a Rec Room user created a version of Beat Saber years ago.) https://nwn.bl…
@JoshConstine ugh. “why is facebook paying these people for their product instead of ripping them off?” is not what I want the government to be forcing
The FTC is supposed to be driven by facts and law, not politics and scoreboards. But again, Team Khan's leak to Capitol Forum tells all - it's not about the legal argument against the deal so much as the suit being “a meaningful blow” to Meta 3/ https://twitter.com/...
This was a 3-2 vote. The GOP talks a big game about big tech, but when there's an actual Facebook merger on deck, @CSWilsonFTC and @FTCPhillips voted to help Zuckerberg. https://t.co/m6B9qA94SN
@MikeIsaac This is a really bizarre injunction, on first glance. Within has a tiny userbase, while the most active usage of its Quest headsets are on competing metaverse platforms Rec Room & VRChat — which have far, far, far more users than Meta's own Horizon. https://nwn.blogs.c…
The irony is that on the FTC's own numbers, acquisitions by big tech companies are a tiny % of startups and startup exists. That whole ‘big tech buys lots of startups to kill them!’ narrative was nonsense. https://www.ben-evans.com/...
@lucasmtny ... Because I'm fairly certain, that there was another party involved that caused a bidding war, and that other party has a history of working through the FTC to attack competitors or get what it wants.
This perfectly encapsulates why I increasingly worry that the “New Right” stuff is just culture-war noise-making, that the right remains structurally, and perhaps irredeemably, pro-big business. https://twitter.com/...
2. ABSURDLY NARROW MARKET DEFINITION (again): Just like the FTC's pending antitrust case against Meta, the case relies on an absurdly narrow market definition that overlooks the reality of competition between platforms. 5/
@lucasmtny ... The FTC filed a lawsuit against Qualcomm in the last 3 days of the Obama admin and indirectly did Apple's bidding, making an extremely bad case and riding it as far as the FTC could even though most people agreed it was a pretty bad lawsuit to begin with. https://e…
@RonenV Absolutely. So now Facebook's only option (given it's not great at inventing totally new things since 2006) is copying. This also spooks all investors of social startups. If there's no acquisition exit option, they can only fund startups that can IPO
@lucasmtny ... I suspected a bidding war from the get-go. I've seen that Apple is extremely interested in VR fitness. That, coupled with how tightly integrated the Apple Watch already is in Supernatural, its a very logical fit. It also may explain why THIS is the merger that's ge…
Also no end of hilarious that Apple will dominate this market and the FTC is gonna make extra sure that happens. Who needs competition when Zuck let Trump win? https://twitter.com/...
@auradeluxe @ballmatthew what i truly don't understand is how this deal could have been worth $400M (reported by a couple places not officially confirmed) this deal seems like it should have been like 5-10% of that max. What am i missing?
I'm glad the FTC is scrutinizing tech giants' acquisitions more closely. But it doesn't feel like too much of an exaggeration to say that the injunction it's asking for in the Meta/Supernatural case could upend the tech industry https://www.platformer.news/ ... https://twitter.co…
Quite. Given Microsoft gleefully talked up the metaverse potential of Activision ... surely this is where Meta's defence begins. https://twitter.com/...
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 https://twitter.com/...
🚨 NEW 🚨 : The FTC's lawsuit against Meta's Within (VR) deal is rooted more in politics than in the law. It will be long on headlines, but short on results. This spin from @linakhanFTC's staff to Capitol Forum tells you exactly the headlines she is seeking from this ⤵️ 1/ https://…
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?
Wikipedia (sorry) lists at least 15 studios bought up by Xbox, including creators of its biggest hitters such as Halo and others. Then again, Halo was a commimssion, essentially, kinda. Maybe that's another distinction that could play a factor: Xbox moved in b4 game was a success
I'm a public advocate for much greater tech regulation, inc. breakups, forced API exposure, etc. I struggle to see this one. Nearly all of Within's business is on Oculus, probs unprofitable, not a top title, Oculus is losing buckets + remains tiny + need exclusives to standout
FTC Seeks to Block Virtual Reality Giant Meta's Acquisition of Popular App Creator Within https://www.ftc.gov/... // “virtual reality giant” is all you need to know about the politicization of oversight.
And for those wondering, on its face, this acquisition looks *FAR* more benign than Microsoft's acquisition of Activision. Investors in companies both big and small should definitely be clenching all across the board.
2/ @FTC's 3-2 vote signals that a majority of the commission is committed to addressing these concerns in a nascent industry vulnerable to corporate capture. According to the complaint, this deal could reduce innovation and competition in a sector just getting off the ground.
6/6 FB has already made multiple acquisitions in VR based on Zuckerberg's famous mantra of “it's better to buy than compete” - they must be stopped. Good on @FTC for standing up to them, hopefully, before it gets out of hand. Read our full statement: https://www.economicliberties…
BIG: @FTC is suing to block Facebook's acquisition of Within - a virtual reality workout app owner & developer. The agency's new majority is ensuring that Facebook earns, rather than buys, its place in the emerging virtual and augmented reality sector. 🧵 https://twitter.com/...
if the GOP performative angst about “big tech corporate power” and “antitrust reform” was remotely authentic, they'd support the FTC blocking Facebook from hoovering up competitors and dominating a single field but it isn't, so...
whatever you think of this move, it cuts against the popular-in-some-circles idea that regulators are inherently incapable of being proactive or forward-looking in their approach to the tech sector https://twitter.com/...
FTC: “Meta is already a key player at each level of the VR sector [owning] the top-selling device, a leading app store, 7 of the most successful developers, & one of the best-selling apps of all time... This is an illegal acquisition & we will pursue all appropriate relief.” 🔥 ht…
anyway the U.S. would be a much better place if regulators actually did their jobs and scrutinized shitty capture and kill deals and “growth for growth's sake” megamergers once in a while, so I'm all for it https://twitter.com/...
a regulator actually doing its job to prevent one predatory company from crushing all competition will, of course, be greeted by assorted free marketeer embolisms (the startup could still be sold, just not to Facebook) https://t.co/oMC2FoQn48
To sum up: *Last year Facebook conceded it couldn't buy any more social stuff bc of antitrust. But it thought it very much could buy metaverse/AR/VR stuff because that market barely existed and had lots of competition. *Today the FTC says it can't “buy its way to the top. https:/…
FTC suing Meta over acquisition of VR fitness studio Within, stating, among other arguments “Meta would be one step closer to its ultimate goal of owning the entire ‘Metaverse.’” https://www.washingtonpost.com/ ...
Fascinating to see the FTC sue to block Meta's acquisition of the Supernatural fitness app. Buying up all the talent in VR has been a pillar of the company's strategy over the past few years — I wrote about it last June https://www.platformer.news/ ... https://twitter.com/...
Hilariously, the FTC seems to have blacked out any language praising/illustrating Meta's dominance in VR https://t.co/33O2KGN5RC https://t.co/PuFt4AJw3U
The real story here isn't this specific acquisition, per se. It's relatively small and for a small part of FB's biz. It's what it says about Big Tech's ability to acquire anything going forward. https://twitter.com/...
The US FTC is suing to stop FB buying Within, the fitness app. I suspect we are going to see quite a lot of overcorrection from waving Instagram and WhatsApp through to blocking small non-competitive deals, acquihires and rescues of failed startups. https://storage.courtlistener.…
Within is known for its VR fitness apps. Chalk “virtual reality fitness” up as the ultimate example of a scope of market fallacy. This is just vindictive stuff from FTC. https://twitter.com/...
'The antitrust lawsuit is the first to be filed under Lina Khan, the commission's chair and a leading progressive critic of corporate concentration, against one of the tech giants.' https://twitter.com/...
If you believe in synergies between data protection law, privacy law, consumer law, competition law, and Metaverse then this @FTC announcement is for you: https://twitter.com/...
Zuck's gonna have to push his employees extra hard now because he can't fall back on buying his way into a VR monopoly so easily https://twitter.com/...
Boom. FTC Chair Lina Khan files the first merger challenge to a big tech acquisition by trying to block Facebook's purchase of virtual reality app maker Within. Both Republican commissioners vote oppose the challenge. https://www.ftc.gov/...
zuckco can't innovate, is despised by young adults, has lost the public trust, pivoted to a hokey techno-future nobody believes in, and now can't even capture and kill competitors to compensate. sucks for zuck. https://twitter.com/...