A federal judge in California has rejected the Federal Trade Commission’s attempt to block Meta from acquiring virtual reality startup Within for an estimated $400 million. The decision, which all but greenlights one of Meta’s largest acquisitions in years, marks a major victory for the company and a stinging defeat for the tech critical Biden-era FTC.
The decision, according to Bloomberg, came from US District Judge Edward Davila in San Jose, who rejected the FTC’s request for a preliminary injunction to block the deal. Meta, however, hasn’t won just yet. Davila reportedly issued a separate temporary restraining order preventing Meta from closing the deal until February 7, giving the FTC six days to appeal the decision.
Meta did not immediately respond to Gizmodo’s request for comment, and the FTC declined to comment.
The FTC filed its complaint attempting to block the acquisition back in July, claiming the deal was a prime example of illegal anticompetitive behavior. In its complaint, the FTC accused Meta of buying Within to snuff out competition in the VR fitness space. Within, which makes the popular is the company behind the popular VR fitness app Supernatural, which competes against Meta’s own Beat Saber fitness game. Meta already dominates consumer VR hardware and is rapidly expanding its VR app store. The acquisition, regulators argued, would put Meta one step closer to achieving a VR monopoly.
“Letting Meta acquire Supernatural would combine the makers of two of the most significant VR fitness apps, thereby eliminating beneficial rivalry between Meta’s Beat Saber app and Within’s Supernatural app,” the FTC complaint reads.
Meta rejects that argument, however, and says the acquisition would actually be a boon for both VR consumer and developers and increase competition. In a past statement, Meta criticized the FTC’e efforts as “based on ideology and speculation,” and said a failure to seal the deal would send a “chilling message,” to developers in the VR community. Meta previously agreed to delay its acquisition until January 31.
Now, all eyes turn to the FTC to see whether or not its decides to appeal. If it does, the agency and Meta could be in store for a game of legal attrition, one Meta hasn’t shown a great deal of interest in sticking around for. During testimony last month Meta Chief Technology Officer Chief Technology Officer Andrew Bosworth said the VR space simply moved too fast for Meta to engage in lengthy legal battle.
“If this deal doesn’t close in a timely matter, we’ll probably just walk away,” Bosworth said.
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