Federal antitrust regulators had sought to block the acquisition on the grounds that it would hurt competition in the emerging virtual reality market.
But U.S. District Judge Edward Davila denied the Federal Trade Commission’s request for a preliminary injunction against the deal. The judge’s ruling said the agency did not provide sufficient evidence to prove its case.
Meta said it will now proceed with its acquisition of Within Unlimited.
The FTC had argued that Meta’s acquisition of the small company — reminiscent of Facebook’s early purchases of Instagram and WhatsApp — would hurt competition in the emerging virtual reality market.
Allowing the tech giant to buy Los Angeles-based Within Unlimited, the FTC had argued, would violate antitrust laws and dampen innovation, hurting consumers who may face higher prices and fewer options outside of Meta-controlled platforms.
LOSING ON PURPOSE
Does Lina Khan ever win a case? In her latest embarrassment, a federal judge last week rebuked the Federal Trade Commission for not doing its homework and dismissed its attempt to block Meta’s acquisition of the virtual reality app developer Within Unlimited.
Meta CEO Mark Zuckerberg has sought to expand in the burgeoning virtual reality (VR) market as user growth at its Facebook subsidiary has slowed. Lacking the in-house expertise, Meta has bought apps to complement its VR headsets. This includes Within’s popular fitness app Supernatural, which offers guided workouts in exotic virtual locations.
Judge ruled late Tuesday night 1/31/23 it was reported on 2/01/23
By JOSH SISCO
02/01/2023 11:12 AM EST
Updated: 02/01/2023 01:24 PM EST
Meta notched early court approval of its bid to purchase Within Unlimited, maker of the virtual reality fitness app Supernatural, a critical blow to the Federal Trade Commission’s efforts to fight against consolidation in the tech sector.
In a pair of sealed rulings, U.S. District Judge Edward Davila declined to issue a preliminary injunction against the deal while the FTC pursues a separate case in its in-house administrative court, according to a person with knowledge of the matter. Davila did put the deal on hold for another week while the agency decides whether to appeal, said the person, who was granted anonymity to discuss the sealed rulings.
“Out of respect for the court’s orders, the FTC is not in a position to comment at this time,” an agency spokesperson said. A Meta spokesperson did not respond for comment.
Bloomberg earlier reported the outcome of Davila’s rulings.
The case was the first to challenge a consumer tech deal from the FTC under Chair Lina Khan — the influential antitrust thinker whom Biden nominated to one of the most powerful corporate watchdog jobs in the federal government. The hearing was closely watched in tech and legal circles as a key test of the FTC’s authority under Khan to pursue alleged anticompetitive conduct using aggressive, largely untested legal theories.
The sealed rulings late Tuesday night from Davila came more than a month after a seven-day hearing, which culminated in Meta CEO Mark Zuckerberg taking the stand in a San Jose, California, federal courtroom to defend the deal.
An administrative trial is currently set to start Feb. 13 and the FTC will also need to decide whether to move forward with that case as well.
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