The judge said to allow the virtual reality startup Meta’s deal to move forward

bloomberg I mentioned earlier Judge Davila’s decision.

The FTC lawsuit to block the deal was the first of those developed entirely under the direction of Ms. Khan, a post-prominent legal scholar. I wrote a review for Amazon which went viral, to be taken up in court. The FTC is also looking to prevent more “vertical” deals, where the two companies do not compete directly. Challenge Microsoft’s $69 billion buyout Video game publisher Activision Blizzard in December. This month, the Department of Justice Google has been accused of monopoly abuse On technology that places ads on websites.

Former FTC chair William E. Kovacic said the ruling in the Meta case would be more problematic for the agency if the judge criticized the legal theories underlying the new deal challenge. But if Judge Davila finds the FTC’s legal theories plausible — even if the agency’s factual assertions are weak in this case — then “this is a low-impact defeat” unlikely to hurt its future efforts, Mr. Kovacic said.

The case was heard in federal court in San Jose, California, in December. During the seven-day hearing, Meta CEO Mark Zuckerberg and Chief Technology Officer Andrew Bosworth testified. The FTC argued that if Meta did not buy Supernatural, it would develop its own virtual reality fitness game.

The Meta case was based on proving that developing or acquiring a fitness app was just a small part of a strategy that would eventually propel virtual reality, and thus the metaverse, to widespread popularity.

During the December hearing, an FTC attorney asked Mr. Zuckerberg If it’s true that getting or developing a fitness app kept him up at night. Zuckerberg said that fitness apps were just one type of app the company was interested in.

“Fitness was probably the fourth or fifth use case that I thought would be important,” he said, ranking apps focused on gaming, productivity, and social interactions as higher priorities. He told the lawyer that developing a fitness app didn’t cost him any sleep.

Mr. Zuckerberg also told Judge Davila that if he blocked the deal, it would have a “chilling effect.”