FTC Chair Khan Reportedly Overruled Staff To Sue Meta

Federal Trade Commission head Lina Khan overruled staff advice to intervene in a Meta virtual reality studio acquisition, Bloomberg reports.

Sources reportedly told Bloomberg that staff had been “recommending against” suing to block Meta’s acquisition of Within, which makes the popular VR fitness app Supernatural. The FTC voted 3 to 2 in favor of the suit earlier this week, splitting respectively along Democratic and Republican party lines.

Bloomberg’s article doesn’t detail the substance of the disagreement over Meta’s Supernatural acquisition, although it does note that “each of the commissioners had the opportunity to test out Meta’s Oculus product, Within’s Supernatural, and Meta’s Beat Saber.” But the report would emphasize that Khan is making an unusually aggressive push to limit the power of companies like Meta, particularly compared to earlier interventions against major tech players. In 2013, for instance, the FTC overruled input from staff who recommended bringing an antitrust suit against Google, ending the investigation despite concerns about its business practices.

The FTC’s latest suit targets the specific category of VR fitness apps. But a key claim is that buying Within has a larger purpose for Meta: “building, and ultimately controlling, a VR ‘metaverse.’” It asserts that by buying the fitness studio, Meta is removing competition that could spur it to keep improving its own software offerings, including the fitness-adjacent rhythm game Beat Saber.

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