On Monday, Facebook announced that it intends to buy neural interface startup CTRL-Labs. Though the Big Tech firm didn’t disclose terms, Bloomberg reports that the deal is worth between $500 million and $1 billion. However, the acquisition may not go through as the social network is currently facing intense regulatory scrutiny.
Mind Over Matter
Established in 2015, CTRL-Labs’ core product is a neural interface that can detect users’ intentions through a wired wristband. The company’s technology works by monitoring a person’s neural activity and translating it into computer commands.
At present, the system’s functions are rudimentary. As time goes on, the startup hopes to develop its tech further. It envisions users playing games, using social media, and performing other tasks just by thinking about them.
Pre-acquisition, CTRL-Labs created a great deal of interest in the technology sector. Since its founding, the startup has received $67 million in outside investments from organizations like Amazon, Google, and the Founders Fund.
In a post on his account, Facebook’s augmented and virtual reality head Andrew Bosworth explained that the company will use CTRL-Labs’ tech to build a consumer mind-reading wristband. “Technology like this has the potential to open up new creative possibilities and reimagine 19th century inventions in a 21st century world,” write the executive.
When a large corporation contemplates making a significant acquisition, regulatory approvals are always a concern. Facebook has won itself an even closer look thanks to its many missteps. In July, the Federal Trade Commission (FTC) fined the social media service $5 billion for its role in the Cambridge Analytica scandal. Moreover, the FTC is now investigating the firm’s allegedly anticompetitive practices.
Now Senator Amy Klobuchar (D-MN) argues that Facebook’s acquisition of CTRL-Labs should be subject to an antitrust inquiry. “If digital giants use strategic acquisitions to snuff out emerging or potential future competitors the harm may not be as immediately obvious but those harms are no less damaging or enduring in the long run,” said the politician.
Facebook told Bloomberg that its new purchase doesn’t qualify as an antitrust issue because it’s not in competition with CTRL-Labs. The social network argues that it doesn’t yet make neural interface tech. However, the firm’s claim is contestable. In 2017, the company announced that it was indeed developing a “brain-computer interface.” Accordingly, U.S. authorities could argue the social network is trying to buy its competition before it becomes a real rival.
Buying the Competition
Last week, The Burn-In reported that Facebook is teaming with Ray-Ban to develop a smart glasses product. The firm initiated the partnership because its internal efforts to create augmented reality (AR) eyewear had proved unsuccessful. Notably, one of the company’s projects was a ring peripheral that would act as an input for its online-enabled headset.
Presumably, regulators could argue that Facebook wants to acquire CTRL-Labs to prevent a competitor from releasing a product that is similar to one it is developing.
Years ago, when the social media corporation purchased rival firms Instagram and WhatsApp, the FTC approved the transactions. But now the agency is reportedly re-examining those deals as evidence of anticompetitive behavior. As such, Facebook’s proposed acquisition of CTRL-Labs is uncertain at best.