A California judge has allowed Meta to complete its acquisition of virtual reality fitness startup Within, despite an ongoing antitrust suit by the Federal Trade Commission. according to an unsealed statement. On Wednesday, Bloomberg reported that the court denied the FTC’s request to block the deal, but with a one-week delay that gives the FTC time to appeal. The orders were placed on Tuesday and a status hearing on the case is scheduled for February 7.
The FTC sued in July 2022 to stop Meta’s acquisition of Within, which makes the popular VR app Supernatural. The agency argued that purchasing Meta would increase its dominance in the consumer VR market, where Meta has focused much of its resources in recent years. The commission highlighted Meta’s previous merger with the company behind it Defeat Saber in 2019, claiming that the addition of Within was a “favorable rivalrybetween the two companies.
Meta fought the decision, but in December it agreed to delay its acquisition of Within until January 31 — though Meta CTO Andrew Bosworth said at a hearing that the company could drop the deal if it “doesn’t close on time.” .
While Meta has significant financial and VR engineering resources, it lacked the capabilities unique to VR-specific fitness apps, particularly fitness content creation and studio production facilities. “As a VR platform developer, Meta can enjoy many of the promising benefits of the growth of VR fitness without entering the VR fitness app market itself.”
The FTC apparently had internal disagreements over whether to intervene in Meta and Within’s deal, and the continuation of the case stands in stark contrast to several relatively smooth acquisitions of Meta (formerly Facebook), including the purchase of VR startup Oculus in 2014. Due to court orders, the FTC is not in a position to comment at this time,” said Douglas Farrar, FTC director of public affairs. The edge following a request for comment.
“We are pleased that the court has denied the FTC’s request to block our acquisition of Within,” Meta spokesperson Stephen Peters said in a statement to The edge. “This deal will deliver competitive advantages to the ecosystem and drive innovation that will benefit people, developers and the wider VR space. We look forward to closing the transaction soon.”
If this week’s order stands, it would spell a loss for bureau chief and antitrust crusader Lina Khan. Defeat would come as the FTC fights to stop another game-related merger: Microsoft’s acquisition of Activision. The two cases have significant differences — most notably the small size of the VR market compared to the overall gaming industry, as well as the FTC’s choice to focus specifically on the fitness VR app market in the Within case , not VR or games in general. Nevertheless, the decision could signal an uphill battle to limit tech industry consolidation — despite persistent efforts to give antitrust watchdogs teeth.
Update February 4, 12:50 ET: Updated to add a copy of the unsealed request as well as a statement from a Meta spokesperson.