The Federal Trade Commission will not appeal a recent federal court order allowing Meta to buy VR startup Within, an agency official told reporters Monday.

The FTC sued last July to block Meta’s acquisition of Within, the company behind the popular fitness app Supernatural. The agency argued that the purchase would increase Meta’s dominance in the VR market, pointing to the Oculus maker’s previous 2019 merger with the company behind Defeat Saber. Meta challenged the lawsuit, but later agreed to delay closing the deal until January 31.

Shortly after the court gave the green light to the impending merger on Friday, Meta spokesman Stephen Peters told me The edge the company looks forward to closing the transaction soon. Meta declined to comment on the FTC’s choice not to appeal the order.

The FTC’s failure to halt the merger marks one of Chairman Lina Khan’s first major losses as the agency’s head. An antitrust technology pioneer, Khan has been doggedly going after big tech companies over alleged anti-competitive behavior since she was confirmed to the post in 2021. Last July, Bloomberg reported that Khan overruled FTC staff advice not to intervene in Meta’s proposed merger with Within. FTC commissioners voted 3-2 to file the lawsuit.

In Monday’s call to reporters, FTC officials were optimistic that failing to halt Meta’s merger would not harm other pending antitrust cases targeting the technology industry, such as the lawsuit against Microsoft’s acquisition of Activision. An FTC official noted that Friday’s ruling agreed with the agency that when litigating merger cases, courts should consider the potential of a merger to harm competition in the future.

While the Microsoft and Meta mergers would both impact the gaming industry, the size of the deals varies greatly. Meta’s merger targeted a startup in the burgeoning VR industry. Microsoft, two decades into building the Xbox platform and already owning multiple game developers, has proposed an acquisition of Activision, the company behind the Duty series that also owns Blizzard, which includes titles like Survive 2, And King, the creator of mobile games like Candy Crush.

The size and scope of Microsoft’s proposal are already being challenged by regulators in the European Union. On Friday, the European Commission issued a formal warning against closing the deal with Activision. The European Commission opened its own investigation into the proposed merger in November to “ensure that opportunities remain for future and existing distributors of PC and console video games”.