F.T.C. Files to Block Meta’s Virtual Reality Deal

WASHINGTON — The Federal Trade Commission on Wednesday filed for an injunction to block Meta, the company formerly known as Facebook, from buying a virtual reality company called Within, limiting the company’s push into the so-called metaverse and signaling a shift in how the agency is approaching tech deals.

The antitrust lawsuit is the first to be filed under Lina Khan, the commission’s chair and a leading progressive critic of corporate concentration, against one of the tech giants. Ms. Khan has argued that regulators must stop violations of competition and consumer protection laws when it comes to the bleeding edge of technology, including virtual and augmented reality, and not just in areas of business where companies have already become behemoths.

“Meta could have chosen to try to compete,” the F.T.C. said in its lawsuit. “Instead, it chose to buy” a top company in what the government called a ‘vitally important’ category.

Meta did not immediately respond to a request for comment.

Meta and other large tech companies like Google, Apple and Amazon have increasingly faced scrutiny over their power and dominance. Under Ms. Khan’s predecessor, the F.T.C. filed a lawsuit against Facebook that argued the company shut down nascent competition through acquisitions. The Justice Department has also sued Google over whether the company abused a monopoly over online search.

More cases could be coming. The F.T.C. is investigating whether Amazon has violated antitrust laws, and the Justice Department has inquiries into Google’s dominance over advertising technology and Apple’s App Store policies.

This is a developing news story and will be updated.