The FTC made a big splash this week when it filed an injunction to block Meta from buying a virtual reality company, arguing that the acquisition was anticompetitive. This filing follows Chair Khan’s comments at the April 2022 Antitrust and Competition Conference focusing on mergers as an enforcement priority, and her view that agency inaction is worse than the risk of agency backlash. This story and more after the jump.
Wednesday, July 27, 2022
Bureau of Competition: Tech Mergers
- The FTC filed a complaint in the U.S. District Court for the Northern District of California seeking a preliminary injunction to halt Meta and CEO Mark Zuckerberg from acquiring virtual reality (“VR”) development studio Within Unlimited. Specifically, the complaint alleges that Meta is attempting to acquire Within in order to own Within’s popular VR fitness app, Supernatural, and that Meta is doing this instead of either developing its own app to compete within the VR fitness app market or improving its current VR fitness app Beat Saber. The FTC further alleges that the acquisition would lessen competition in two highly concentrated markets: the market for VR apps dedicated solely to fitness, and the overall market of all VR fitness apps, which includes apps that have an incidental fitness benefit. The competitive rivalry between Supernatural and Beat Saber would allegedly be lost as well as a result of the acquisition.
Thursday, July 28, 2022
Bureau of Consumer Protection: Credit and Finance
- The Commission sued in the U.S. District Court for the Eastern District of Texas to enjoin Texas-based company First American Payment Systems from engaging in harmful and deceptive payment processing practices against small merchants who rely on credit cards, debit cards, and checks to accept payment from customers. The complaint alleges that the company harmed merchants by (1) deceiving them about pricing and savings with hidden terms, (2) imposing surprise cancellation fees, (3) using an online enrollment system that concealed key contract terms, (4) making “zombie” withdrawals from the merchants’ bank accounts even after the merchant had withdrawn consent to access the account. The complaint includes a proposed stipulated order requiring the company to stop this behavior and to pay the FTC $4.9 million, which the agency will then refund to affected merchants.
Friday, July 29, 2022
Bureau of Consumer Protection: Deceptive Advertising and Marketing
- In a unanimous vote, the FTC has finalized its order against Lions Not Sheep Products, LLC for violating the agency’s “Made in USA” rule. As summarized on this blog in May, the company not only labeled wholly imported goods as American-made, but even went so far as to rip out “Made in China” tags and replace them with fake “Made in USA” tags.
For further information, please contact:
Kari Ferver, Crowell & Moring
kferver@crowell.com
