A California judge is reportedly allowing Meta to close its acquisition of virtual reality fitness startup Within, despite an ongoing antitrust case by the Federal Trade Commission. Bloomberg reports that a pair of sealed orders deny the FTC’s request to block the deal but with a one-week delay that will give the FTC time to appeal. The orders were posted yesterday, and a status hearing on the case is set for February 7th.
The FTC sued in July of 2022 to stop Meta’s acquisition of Within, which makes the popular VR app Supernatural. The agency argued that Meta’s purchase would expand its dominance in the consumer VR market, where Meta has staked many of its resources in recent years. The commission highlighted Meta’s previous merger with the company behind Beat Saber in 2019, claiming that the addition of Within would eliminate a “beneficial rivalry” between the two companies.
Meta fought the decision, but in December, it agreed to delay its Within acquisition until January 31st — although Meta CTO Andrew Bosworth said in a hearing that the company might drop the deal if it “doesn’t close in a timely manner.” Meta declined to discuss the decision at this point.
The FTC apparently faced internal disagreements over whether to intervene in Meta and Within’s deal, and its pursuit of the case stands in stark contrast to several relatively smooth Meta (formerly Facebook) acquisitions, including its purchase of VR startup Oculus in 2014. “Out of respect for the court’s orders, the FTC is not in a position to comment at this time,” FTC director of public affairs Douglas Farrar told The Verge in response to a request for comment.
If this week’s order stands, it would represent a loss for agency head and antitrust crusader Lina Khan. The defeat would come as the FTC fights to stop another game-related merger: Microsoft’s acquisition of Activision. The two cases have significant differences — particularly the small size of the VR market compared to the overall games industry, as well as the FTC’s choice to specifically focus on the market for fitness VR apps in the Within case, not VR or games in general. Nonetheless, the decision could indicate an uphill battle to limit tech industry consolidation — despite persistent attempts to give antitrust watchdogs teeth.