FTC withdraws from adjudication in fight with Meta over Within deal

The logo of Meta Platforms' business group is seen in Brussels
The logo of Meta Platforms' business group is seen in Brussels, Belgium December 6, 2022. REUTERS/Yves Herman/File Photo

WASHINGTON, Feb 10 (Reuters) - The U.S. Federal Trade Commission, which lost a fight in court over whether Facebook parent Meta Platforms Inc (META.O) could buy VR content maker Within, has decided to withdraw the matter from its in-house adjudication, which was to begin on Monday.

An FTC administrative law judge had scheduled a hearing for the matter for next week, which will now be canceled. But no final decision had been made on whether the agency will go forward at a later date.

"The FTC is still deciding whether or not to continue an in-house trial before the administrative judge," an FTC spokesperson said.

FTC merger challenges can follow two tracks, pursuing the case in the federal court system or an in-house trial.

The agency lost in court. Judge Edward Davila of the U.S. District Court for the Northern District of California rejected the FTC's concerns that Meta's purchase of Within would reduce competition in a new market and declined to order a preliminary injunction. The FTC said Monday it would not appeal.

Meta, which closed the deal Wednesday, declined comment.

The FTC sued Meta in July to stop the Within deal, saying Meta's "campaign to conquer VR" began in 2014 when it acquired Oculus, a VR headset manufacturer.

Meta did not disclose what it was paying for Within, but the Information reported it was about $400 million.

A December trial to decide if Meta could go forward with the relatively small deal was seen as a test of the FTC's bid to head off what it sees as a repeat of the company acquiring small upcoming would-be rivals to dominate a market, this time in the nascent virtual and augmented reality markets.

The FTC has separately filed a lawsuit against Meta's Facebook, asking a court in 2020 to force it to sell subsidiaries Instagram and WhatsApp, saying the social media company used a "buy or bury" strategy to snap up rivals and keep smaller competitors at bay.

Reporting by Diane Bartz; Editing by Cynthia Osterman and Anna Driver

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