Mark Zuckerberg testified in US federal court about Meta's acquisition of Within, as the FTC seeks an injunction to stop the deal, in a highly unusual challenge
Meta's chief executive made a rare court appearance as the Federal Trade Commission tries to block his company's purchase of the virtual reality start-up Within.
New York Times
Context & Ripple Effects
The Within fight has been building for a year: the FTC opened an in-depth probe into Meta's purchase of the Supernatural maker in late 2021, then in August agreed to drop Zuckerberg as a defendant after Meta vowed he wouldn't buy the studio personally [[a:982107]]. A court filing put Zuckerberg, Meta CTO Andrew Bosworth, and Within CEO Chris Milk on the witness list [[a:984317]], and now the chief executive has actually taken the stand.
What makes the appearance unusual is what he is defending: the FTC is pressing a novel, untested legal argument to block the deal [[a:985573]], and officials have said a government loss could spur Congress to rewrite antitrust laws. Zuckerberg testifying in person signals how much weight Meta is putting on winning this one in court rather than settling.
First-order effects
Zuckerberg is now personally arguing Meta's case before a federal judge despite being dropped as a defendant months earlier, with Bosworth and Chris Milk corroborating from the witness box.
The immediate stake is binary: either the FTC's injunction holds and Meta loses Within's Supernatural fitness title, or the judge rejects the agency's untested theory and the acquisition closes.
Second-order effects
A courtroom loss for the FTC would hand Meta a cleared path for VR content acquisitions while pushing the agency's own officials toward their stated fallback: pressing Congress to rewrite antitrust law instead.
Other platform owners weighing VR and gaming studio purchases gain a live read on whether the FTC will litigate deals in nascent categories rather than clear them, raising the expected cost and timeline of every comparable bid.
Third-order effects
If the FTC's potential-competition theory survives contact with judges, merger review shifts from deal-size thresholds toward arguments about emerging markets, forcing acquirers to treat litigation risk as a standard line item in startup purchases.
The case positions federal courts as the proving ground for antitrust doctrine that Congress may then codify — a structural handoff from agencies losing in court to legislators rewriting the rules they lost under.
The trend: The FTC's Within challenge is a data point in regulators' shift toward litigating novel antitrust theories against Big Tech acquisitions before they close, with Congress positioned as the backstop if the courts say no.
This is a big hit early on for the FTC, which has been fighting against the notion that Meta is incapable of building apps in-house. Zuckerberg seems to have more confidence in Meta's aptitude here than the case his counsel has been presenting. https://twitter.com/...
The FTC is seeking to prevent Facebook's parent from acquiring Within Unlimited, the company behind virtual-reality fitness game “Supernatural” https://www.wsj.com/...
As Zuckerberg shows, this was about improving VR for all. At the same time, @Meta competes with @Steam, @HP, @microsoft, and @Sony in the VR space, just to name a few competitors.
Since the @FTC claims to be “underfunded” it should dropping this loser lawsuit and return to doing its job - protecting consumers. The @FTC has sole enforcement of Do Not Call it must stop the robocalls that make our phones unusable not waste our money on this witch-hunt.
FTC: “What did you mean by using acquisitions opportunistically?” Zuckerberg: “I meant this to say that we build most of the apps ourselves.” FTC: “Facebook was and still is a very strong software company, correct?” Zuckerberg: “I think so.”
This is an aside, but what has come through in this Meta vs. FTC trial is how clearly Zuckerberg doesn't want to find himself in the position he is in today, running his software on someone else's hardware. He wants to be the Apple of the metaverse (insert railroad analogy).
Mark Zuckerberg defended Meta's reliance on acquisitions to build out virtual reality. “Fitness was probably the 4th or 5th use case that I thought would be important,” he said, adding that gaming, social and productivity categories would rank higher. https://www.washingtonpost.c…
This was dodgy of Zuckerberg, and misinterpreted a bit here. Social is not a distinct category. It is an overlay of game and fitness categories. The social aspect of fitness (live & group classes, other network effects) has been much discussed here. https://www.nytimes.com/... ht…
In an alternate timeline Twitter is just a messaging app we complain about using all the time, and we are all very interested in Mark Zuckberg taking the stand in a Lina Khan antitrust case. https://www.nytimes.com/...
Good morning from San Jose! I'm waiting outside Judge Ed Davila's courtroom to cover the last day of the high-stakes hearing over the FTC's bid to block Meta's merger with VR app maker Within. Mark Zuckerberg just walked down the hallway. Looks like he'll be taking the stand.
In San Jose today, waiting for Mark Zuckerberg to appear to give his testimony on the FTC/Meta/Within trial. I'll be filing to the NYT first (hi editors) but will follow with tweets.
Good morning from San Jose. The FTC just called Mark Zuckerberg to the stand. This is the final day of hearings in the FTC's effort to enjoin Meta's acquisition of VR app-maker Within. I'll be posting updates as we go. https://twitter.com/...
Reality Labs numbers from Meta's 10Q being read into the record: - $3.97B in cost expenses in 2022 Q3, a 23% increase over 2021 - Revenues of $1.4B for Q1-Q3 of 2022 - Total losses = $9.4B in first 3Q's of 2022 - Over $10.8B in costs and expenses so far in 2022.