The company was in advanced discussions with Houseparty but ended deal talks after it became clear that acquiring another social media company would be too risky, given Facebook's dominance in the space, the Times reported.
Representatives from Facebook were not immediately available for comment.
Houseparty allows users to video chat with multiple users at once and is popular among those under age 24. The company was acquired in June by Fortnite maker Epic Games for an undisclosed sum.
The report comes as Facebook and other Silicon Valley giants face rising antitrust scrutiny from Washington and beyond. Last month, the Department of Justice announced that it's opening a broad antitrust review of online platforms that dominate internet search, social media and retail services.
Additionally, Facebook disclosed in its latest earnings report that the Federal Trade Commission has opened a new probe into the company over antitrust concerns.