Meta Urges Judge To Dismiss FTC Suit Over Supernatural Purchase

The Federal Trade Commission lacks a valid ground to block Meta Platform's planned acquisition of Within Unlimited, developer of the virtual reality fitness app Supernatural, Meta is telling a federal judge.

"The FTC has no viable claim here as a matter of law," Meta argues in papers filed Thursday afternoon with U.S. District Judge Edward Davila in the Northern District of California.

The FTC sued over the planned $400 million deal in July, claiming that merger would diminish competition in the market for virtual reality fitness apps.

The agency initially alleged that Meta's Beat Saber competes with Supernatural in the market for virtual reality fitness apps -- meaning the acquisition would eliminate one of Meta's rivals. But late last week, the FTC pared back its complaint, which now alleges that the merger could diminish “potential competition” in the market for dedicated virtual reality fitness apps.

Meta argues that the FTC's new claim doesn't provide a reason to block the merger.

“In the past four decades, no court has accepted a 'potential competition' theory to find an acquisition in violation of Section 7 of the Clayton Act,” Meta writes, referring to the portion of the antitrust laws that prohibit deals that could create monopolies. “On the contrary, every time the FTC has sought to enjoin such a transaction on that theory, the court has denied injunctive relief.”

The company is asking Davila to dismiss the complaint with prejudice -- which would prevent the FTC from refining its allegations and bringing them again.

This lawsuit isn't Meta's only battle with the FTC. The agency also brought an antitrust case over the company's prior purchases of Instagram and WhatsApp.

That matter is pending in Washington, D.C. federal court.

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