U.S. judge denies FTC request to stop Meta from acquiring VR firm Within

WASHINGTON (Reuters) -A judge on Friday released a ruling denying the Federal Trade Commission's request to stop Meta Platforms Inc from buying virtual reality content maker Within Unlimited, rejecting the regulator's concerns the deal would reduce competition in a new market.

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 ruling had been issued in a sealed form earlier this week. The version issued on Friday evening was redacted.

A Meta spokesperson said the Facebook and Instagram owner was "pleased that the Court has denied the FTC’s motion to block our acquisition of Within."

"We look forward to closing the transaction soon," the spokesperson said in a statement.

The FTC did not immediately respond to a request for comment.

Judge Edward Davila of the U.S. District Court for the Northern District of California said the FTC had failed to show that Meta would have entered the market to make dedicated fitness content if it was unable to buy Within.

"Though Meta boasts considerable financial and VR engineering resources, it did not possess the capabilities unique to VR dedicated fitness apps, specifically fitness content creation and studio production facilities," the judge wrote.

The decision is good news for Meta boss and founder Mark Zuckerberg, who defended the acquisition in testimony in December, arguing that his company was helping to build but not dominate the virtual reality industry.

Zuckerberg had testified in federal court in San Jose, California, that owning Within was "not that critical" to Meta's ambitions and that it was "less important that we own the experiences than that they exist."

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

(Reporting by Diane Bartz; Editing by Lincoln Feast and William Mallard)