FTC faces setback in bid to dam Meta’s acquisition of VR developer Inside

The Federal Trade Commission has suffered a setback in its attempt to prevent Meta from buying Supernatural developer Within Unlimited. According to Bloomberg, a federal court this week denied the agency’s request for a preliminary injunction to block the purchase. The deal reportedly won’t close for at least another week yet, as the court also issued a temporary restraining order to give the FTC time to decide whether to appeal the ruling.

Engadget could not confirm Bloomberg’s reporting because the court documents announcing the decision are sealed. Meta did not immediately respond to a comment request. The FTC sued the company last July, arguing Meta’s acquisition of Within would reduce competition in the emerging virtual reality market. Within is the creator of Supernatural, one of the most popular VR exercise apps on the Oculus Quest Store. An eight-day trial in December saw Meta CEO Mark Zuckerberg and Chief Technology Officer Andrew “Boz” Bosworth testify. During the hearing, Bosworth said Meta could abandon the acquisition if it did not “close in a timely manner.”

With Wednesday’s decision, the FTC must decide whether to move forward with its antitrust case against Meta. The agency has a hearing scheduled for February 13th with its administrative judge. If the FTC chooses to let the order stand, it will mark an early defeat for agency head Lina Khan. President Biden appointed Khan to the FTC for her expertise in antitrust law. The Meta decision could impact the FTC’s effort to block Microsoft’s acquisition of Activision Blizzard, a case where the agency already faces an uphill battle due to the vertical nature of the proposed merger.

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