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Judge reportedly allows Meta to move forward with VR startup acquisition, in blow to FTC

CNN 2/1/2023 Brian Fung

A federal judge will not block Meta from buying a virtual reality tech startup, according to multiple reports, in a setback for the US government, which had alleged the deal would threaten competition in a nascent market.

Tuesday’s decision, issued by the US District Court for the Northern District of California, is sealed. But according to The Wall Street Journal and The New York Times, the contents of the decision dealt Meta a victory by denying the US government’s request for a preliminary injunction that would have prevented the acquisition from closing. The New York Times cited two people with knowledge of the matter and the Wall Street Journal cited one person familiar with the ruling.

CNN has not independently confirmed the contents of the court’s decision. The Federal Trade Commission, which had sued to block the deal last summer, declined to comment. Meta declined to comment, and several outside attorneys for the company didn’t immediately respond to requests for comment.

The closely watched case involves Meta’s purchase of Within Unlimited, a virtual reality company and maker of a VR fitness app called “Supernatural.” The FTC’s suit had been seen as a major test for Chair Lina Khan, a critic of large tech platforms, as well as of the FTC’s unusual legal theory alleging that Meta’s deal would harm future competition in a rapidly evolving industry.

According to the reports, the judge in the case also issued a separate order that delays Meta’s ability to close its deal for another week to allow the FTC to decide whether to appeal the ruling.

A separate challenge to Meta’s deal is ongoing before an in-house administrative law judge at the FTC. That proceeding could continue despite Tuesday’s ruling, but whether agency officials intend to press ahead is unclear.

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