Last week, a federal judge rejected The Federal Trade Commission’s (FTC) attempt to block Matter’s acquisition of virtual reality (VR) company Unlimited is in the works. According to ReutersAn FTC official said the agency has not decided whether it will take the case before an internal administrative law judge.
Although the FTC was thwarted in its efforts, it is worth examining the legal theory the FTC deployed to stop the acquisition. The FTC argued that if Meta doesn’t buy into Unlimited, the tech giant could one day develop its own VR product to compete with the startup. The government argued that it had a legitimate interest in increasing future competition by blocking the deal.
This tortured logic reflects the FTC’s commitment to the Biden era expand Is its power beyond the purview of the Antitrust Act? The agency distills the radical theory of antitrust enforcement Statement of Policy Issued in November. The agency’s new standards for identifying and combating “unfair practices of competition” rely on vague categories of unfair practices, such as “abusive,” “exploitative,” and “material.” As Commissioner Christine Wilson argued In dissent, “the policy statement provides that only labeling conduct with an appropriate adjective can establish liability.”
Mergers and acquisitions are a fundamental and often competitive Business activities, especially in technology. Yet the FTC does not have to prove that a given business practice causes actual harm in order to bring action against it—only that the practice “shows[s] tend to interfere with competitive conditions.” The FTC has empowered itself to crack down on conduct it finds objectionable in isolation, or, when “examined in the aggregate with the conduct of others engaged in the same or similar conduct, or when the conduct, pursuant to a policy statement, A variety of different practices are examined as part of the cumulative impact by respondents.
Prior to the tenure of chairperson Lina Khan, the accepted theory of antitrust tied the act of antitrust to consumer welfare. “[T]”The policy statement rejects the consumer welfare standard and ignores the Supreme Court’s admonition that antitrust ‘protects competition, not competitors,'” Wilson wrote. at the expense of consumers.” Protecting inefficient competitors almost always raises consumer prices, which will weigh more heavily on inflation-stricken citizens.
The policy statement’s guidelines are mile-wide and infinitely plastic, and allow anti-competitive behavior to be defined however Khan thinks it should be. Its deliberate vagueness forces businesses to guess which practices may or may not be prohibited As with the meta case, however, courts will likely shoot down the FTC’s dubious legal theories like so many Chinese recovery balloons.