PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

The Future of U.S. Startups on Trial: FTC vs. Meta’s Acquisition of Within

By at 8 December, 2022, 3:51 pm

NEWS

For Immediate Release

Washington, D.C. – The Federal Trade Commission’s (FTC’s) case opposing Meta’s acquisition of VR startup Within Unlimited, Inc.  goes to trial today, and Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan said there is more at stake then whether FTC Chair Lina Khan can throw cold water on a deal in order flex her power against everything big.  Kerrigan released the following statement on what could end of being a fruitless strategy for Khan, but a very damaging one for America’s startup ecosystem:

“Against the advice and counsel of FTC professional staff, Chair Khan moved to block this obscure acquisition of a VR startup by Meta. We’ll eventually see whether this weak case, one where Khan’s FTC argues that Meta would stifle competition in the still nascent VR space, will be a waste of agency time and taxpayer dollars. But the big losers are startup entrepreneurs, whose promising firms will find it difficult to connect with a larger company to scale and bring their product or service to market because of the sizable cost and uncertainty of fighting the FTC in court over baseless and fantastical claims that block potential deals.”

“Damaging the U.S. startup ecosystem has serious repercussions for our economy, innovative leadership, competitiveness, job growth, and the future of entrepreneurship. Chair Khan surmised that even a loss in this case could be a win for her agency – that she and her agency simply do not have the proper power to win against big players and therefore Congress needs to revamp the rules. That is what she hopes Congress will do. Win or lose, the message to lawmakers from the startup entrepreneur’s perspective is getting clearer: Congress needs to focus on Chair Khan’s damaging action and agenda and take immediate steps to rein in unwarranted and wasteful interference in productive M&A activity that is undermining our small businesses and U.S. economic and innovative leadership.”

Did you know:

● Nearly half of small-business owners – 43% – say a merger or acquisition is important to their business exit strategy. (Source: NSBA, October 2022Business Survey on Business Planning and Digital Utilization.)

● 13% of startups during the pandemic said: “My goal is to create and grow a business with the hope of it being acquired or sold. (Source: SBE Council Pandemic Startups Survey, March 2022.)

Related resources and content:

FTC Chair Lina Khan: Startup Spoiler, Small Business Insider blog post, December 1, 2022.

Innovation and Startup Ecosystem at Risk: Revamping the U.S. M&A Regulatory Framework, Small Business Insider, July 5, 2022.

The FTC’s Bizarre Attempt to Rationalize Regulatory Overreach, November 18, 2022.

Corporate Power, Competition and Small Business Policy, May 27, 2022.

 

CONTACT:

Karen Kerrigan, kkerrigan@sbecouncil.org

Raymond Keating, rkeating@sbecouncil.org

SBE Council is a nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For 28 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth. Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

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