SBE Council Statement on Rejection of FTC’s Injunction vs. Within-Meta: Startups Breathe a Sigh of Relief…for “the moment”

By SBE Council at 2 February, 2023, 11:31 am

NEWS

FOR IMMEDIATE RELEASE

Washington, D.C. – Chalk one up for startups and common sense, at least for the moment, observed a group that advocates for entrepreneurs and small businesses. In response to a California judge’s decision to allow the acquisition of Within Unlimited by Meta Platforms, Inc., thus rejecting the Federal Trade Commission’s (FTC’s) legal effort to block the purchase, the Small Business & Entrepreneurship Council (SBE Council) said now that FTC Chair Lina Khan’s fantastical claims and ideological crusade have been shredded by real-world facts, she now must not appeal that decision and also drop the commission’s internal administrative trial against the acquisition. SBE Council president & CEO Karen Kerrigan said that moving forward with futile legal activity is wasteful and will continue to fuel disorder and uncertainty within the U.S. startup ecosystem. While SBE Council, like others, are awaiting access to the sealed decision in order to read the details, Kerrigan provided general comments regarding the judge’s decision:

“Startups and tech entrepreneurs are delighted to hear that FTC Chair Lina Khan cannot simply make things up and pretend to know the future of innovative technologies and how or if they will dominate future markets. But, unfortunately, her efforts may not stop with this case. Still, the general outcome of this case should serve to direct Chair Khan in terms of how she and her supporting colleagues need to proceed in their work. For one, they need to consider facts, listen to seasoned FTC staff, and engage with entrepreneurs and startups to understand this dynamic ecosystem. In this case, the professional staff counseled against stopping the acquisition of Within by Meta.”

SBE Council chief economist Raymond J. Keating added:

“Unlike the FTC under the leadership of Lina Khan, U.S. District Judge Edward Davila apparently has decided to work within the realm of economic reality and the law by rejecting the FTC’s attempt to stop Meta’s acquisition of startup Within. The FTC has been playing fantasy games in this case, asserting that this acquisition would be a threat to potential competition in the future. This economically unhinged assertion is the real threat here, with the FTC trying to grab the power to pre-approve mergers and acquisitions. That would inflict serious harm on entrepreneurs and investors, whose exit strategies often are about mergers and acquisitions, and in turn, limit business startups and growth, and innovation, and inflict broad economic harm. The federal court has struck a blow for economic sanity and opportunity.”

Kerrigan concluded:

“It is our hope that Congress conducts extensive oversight into the FTC’s workings, along with the harm Chair Khan’s agenda and activities are inflicting on U.S. competitiveness, innovation and productive startup activity and investment. No industry is safe from Chair Kahn’s directive and mission to ‘act fast’ and pay special attention to ‘next-generation technologies, innovations, and nascent industries across sectors.’ Startups and small businesses dominate every sector of the U.S. economy, and if they are dissuaded or prevented from connecting with the capital and human capital they need to scale, compete and bring their novel products or services to market, America’s economic and innovative leadership will wither.”

Related SBE Council Content:

FTC Chair Khan: Startup Spoiler – Small Business Insider blog, December 2022.

Collateral Damage of Khan’s FTC War on Big Business: Entrepreneurship, Innovation, Consumers – Small Business Insider blog, December 2022.

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

Innovation & Startup Ecosystem at Risk: Revamping the U.S. M&A Regulatory Framework, Recap of SBE Council’s half-day summit, July 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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