Court explains decision to let Meta acquire VR firm

The Federal Trade Commission failed to convince a federal judge to block Meta from purchasing VR fitness startup Within, per a court decision unsealed Friday night.

Driving the news: Media outlets reported Meta's win last week; now it's official. Meta will be free to close on its acquisition following the decision from Judge Edward Davila in U.S. District Court in Northern California.

Why it matters: The loss is a blow to FTC chair Lina Khan's effort to apply broad antitrust principles to emerging markets.

Details: At the heart of the FTC's case was an argument that Meta wanted to buy a VR fitness instead of creating its own, and that the VR fitness space would be be more competitive without the acquisition.

Yes, but: Davila didn't find sufficient evidence, after proceedings that included testimony from CEO Mark Zuckerberg, that the FTC could prove its case in a full trial.

What they're saying: "To the extent the FTC implies that — based solely on the objective evidence of Meta’s resources and its excitement for VR fitness — it would have inevitably found and implemented some unspecified means to enter the market, the Court finds such a theory to be impermissibly speculative," the order reads.

• "The Court concludes that the FTC has failed to establish a likelihood that it would ultimately succeed on the merits... based on the actual potential competition theory."
• "We are pleased that the Court has denied the FTC’s motion to block our acquisition of Within," a Meta spokesperson said. "This deal will bring pro-competitive benefits to the ecosystem and spur innovation that will benefit people, developers, and the VR space more broadly. We look forward to closing the transaction soon."

The other side: Supporters of Khan's agenda have argued that the commission needs to push forward with ambitious cases, even against long odds, in order to advance antitrust law into the digital age and to build supportive case law for future trials.

What's next: The FTC is set to start a separate trial to block the same deal in its own administrative court on February 13, though it could opt not to move forward after the ruling in California.