This court decision has defeated the US Federal Trade Commission’s effort to block the purchase.
Meta Platforms Inc. has received the nod from the courts to acquire Within Unlimited, a virtual reality startup. This is a defeat to the effort the US Federal Trade Commission (FTC) has made to block the purchase deal.
The FTC’s preliminary injunction to block the acquisition was denied in a sealed decision yesterday.
The decision was made by US District Judge Edward Davila in San Jose, California. The decision was to reject the FTC’s request for a preliminary injunction to stop the virtual reality company purchase while the agency worked on a separate in-house court case. The judge also issued a separate temporary restraining order which would stop Meta from being able to close the acquisition deal for a week. This was done to give the FTC the opportunity to appeal the ruling if the agency chooses to do so. This, according to a recent Bloomberg report citing anonymous sources familiar with the matter.
The FTC’s administrative judge will be holding an in-house trial starting on February 13. Before that time, the FTC will have to decide if it will be moving ahead with an appeal.
The judge’s ruling represents the first time FTC Chair Lina Khan has faced a major loss. Khan was appointed by President Joe Biden to strengthen antitrust enforcement as a core pillar of the economic policy of his administration. Khan’s approach to mergers has been notably more aggressive than was the case with her recent predecessors. Moreover, Khan has also boosted the FTC’s focus particularly on tech giants due to the ease with which certain among them could slide into dominant positions in early markets.
The FTC originally sued Meta over the purchase of the virtual reality company back in July 2022.
According to the FTC, Within Unlimited – the company behind the popular VR fitness app Supernatural – would make it easier for Meta to take a dominant position in the young VR industry.
Top execs from Meta, including CEO Mark Zuckerberg and the head of virtual reality Andrew Bosworth, were required to testify in a December hearing that ran for eight days.