Facebook-owner Meta is set to be allowed to acquire Within Unlimited, the creator of the virtual reality fitness app Supernatural. The decision from the California district court judge remains sealed as of Wednesday.
On Wednesday afternoon, Meta’s shares showed a slight increase. This decision represents a notable defeat for the Federal Trade Commission (FTC).
Under the leadership of Chair Lina Khan, known for her progressive stance, the FTC has committed to tackling more challenging cases and adopting a forward-thinking approach in its review of mergers that could potentially become significant competitive threats.
The FTC retains the option to appeal this decision and may choose to pursue an in-house administrative proceeding regarding the merger.
On Tuesday, the agency filed an emergency motion requesting a temporary halt to Meta’s merger plans for an additional week, providing time to consider subsequent steps.
Reports indicated that the judge issued a temporary restraining order to prevent Meta from finalizing the transaction during this period.
The FTC’s lawsuit to block the merger, filed in July, contended that Meta was using the acquisition “to buy its way to the top,” rather than competing on its own merits, as stated by Bureau of Competition Deputy Director John Newman.
This lawsuit aligns with Khan’s vision of pursuing complex cases that challenge the limits of antitrust law. In a 2021 memo to FTC staff, Khan emphasized the importance of being “forward-looking” in enforcement actions and paying close attention to “next-generation technologies, innovations, and nascent industries across sectors.”
In addition to this case, the agency is also involved in a separate monopolization lawsuit against Meta.
The FTC argued that allowing Meta to acquire Within could lead to a decline in the VR fitness app market due to “the mere possibility [that] Meta’s entry has likely influenced competition” in the sector.
A Meta spokesperson commented at the time that the case was “based on ideology and speculation, not evidence. The idea that this acquisition would lead to anticompetitive outcomes in a dynamic space with as much entry and growth as online and connected fitness is simply not credible.”
The FTC spokesperson stated on Wednesday, “In respecting the court’s order, the FTC is not able to comment at this time.” A Meta spokesperson chose not to comment.
