Meta Platforms faces its latest setback on Tuesday after the US Federal Trade Commission (FTC) filed an injunction against a potential buyout.
An upcoming decision from the organisation has placed Meta’s plans to acquire virtual reality (VR) firm Within Unlimited in uncertainty, according to reports.
The news comes after the FTC sued the Menlo Park-based firm in July last year to block the deal from moving forward. According to the regulators, Meta launched a “campaign to conquer VR” in 2014 after buying out VR headset manufacturer Oculus.
The injunction requests that courts block Meta from purchasing Within Unlimited until 23:59 Pacific Time on the first working day following the ruling.
It also adds judges could potentially extend ongoing restraining orders for up to seven days, which expire 23:59 Pacific Time on Tuesday.
Meta Q4 Earnings
The news comes as the FTC aims to block Meta’s acquisition as it maintains a lead in the VR headset marketplace.
⏩Big night for $Meta with earnings due out after-market
Having run 72%, some ask whether to take some off the table – the implied move (priced by options) is 11%, so it could get pretty lively
The market consensus sees Q4 rev -6%, EPS adj -19.6%, GM at 79.6%
— Pepperstone (@PepperstoneFX) February 1, 2023
The measure also comes ahead of Meta’s fourth quarter (Q4) earnings call on Tuesday. In addition to less-than-expected quarterly reports, Meta has been forced to reduce investments in its Reality Labs division. It has also shelved several key products, including its anticipated Project Nazare smart glasses.
The tech giant has also faced strong competition from rival headset firms, including Pico Interactive, HTC VIVE, and Lenovo, among others. The company hopes to launch its Quest 3 consumer headset to boost its standing in the mixed reality market later in 2023.
Meta FTC Case, Global Regulatory Crackdown
Meta has also faced significant pushback from global regulators over moves to develop its iteration of the Metaverse. A European court ruling also hit the company’s revenues over Meta’s advertising policies.
It also received a $414 million USD fine for allegedly forcing users to accept adverts on its social media services. The European bloc’s General Data Protection Regulations (GDPR) bans unauthorised consumer data mining, prompting the ruling.
Reports revealed that Meta earned a massive $118 billion USD in advertising revenues, with the latest ruling slashing seven percent of total advert sales.
Fresh issues surfaced for Meta after global lawmakers increased scrutiny over its mixed reality ambitions. Nick Clegg, Meta Vice President for Global Affairs, assured regulators it would protect its online users and work with global organisations.
The scrutiny began after regulators passed measures to tackle harmful content on the internet. Additionally, the UK submitted its Online Safety Bill in March last year, which sets guidelines for big tech firms failing to protect users from such content.
Those failing to do so could face massive penalties and see high-level executives jailed.
Regarding the injunction, US regulators also filed similar complaints against Microsoft as it aims to buy out Activision Blizzard in a historic $68 billion USD deal.
The FTC has also filed anti-competitive lawsuits against the deal involving Sony Corporation, potentially derailing the latter’s future tech products.
Concerns over Microsoft’s extended reality (XR) ambitions have led to the Redmond, Washington-based firm shelving its AltspaceVR and HoloLens 2 platforms indefinitely.
European Commission regulators accused the tech giant of suppressing rival firms of its Xbox gaming consoles to grow its subscription and cloud-based gaming business.