Why Losing To Meta In Court May Still Be A Win For Regulators

David McCabe reports on tech policy from Washington.

As the Federal Trade Commission prepares to face off in court against Meta over a V.R. start-up deal, the agency is testing a novel argument as part of a strategy to push antitrust law.

President Biden’s antitrust regulators have adopted a mantra: In order to win, they need to be willing to lose.

Since Mr. Biden took office in January 2021, the leaders of the Federal Trade Commission and the Justice Department’s antitrust division have been bringing risky cases that use novel legal arguments to stop corporate mergers and nurture competition. Their goal is to stretch the uses of antitrust law beyond the ways it has been applied for decades, including against the biggest tech companies.

That strategy will be put to the test in a federal courtroom in San Jose, Calif., on Thursday, when lawyers for the F.T.C. plan to draw on some little-used legal arguments to urge a judge to block Meta, Facebook’s parent company, from buying a virtual reality start-up called Within.

In the case, which is the first challenge to a tech giant developed under the F.T.C. chair Lina Khan, the agency is employing an uncommon argument that Meta’s deal would hurt potential competition in a market for virtual reality products that could be robust in the future. In contrast, most antitrust cases have traditionally focused on how a deal would hinder competition in an area that is already mature.

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