Meta Platforms Inc. on Wednesday completed its acquisition of virtual reality startup Within Unlimited Inc. after winning a high-profile antitrust lawsuit focused on the deal.

The acquisition reportedly valued Within at $400 million. Previously, the Los Angeles-based startup raised $52.5 million in funding from Andreessen Horowitz and more than a half-dozen other investors.

Within is the developer of Supernatural, a popular fitness app available on Meta’s Oculus line of VR headsets. Meta first announced plans to buy the startup in October 2021. Last July, the U.S. Federal Trade Commission sued to block the transaction on antitrust grounds.

The FTC raised concerns that the deal could reduce competition in the VR software market. In its lawsuit, the agency brought two main arguments against allowing the deal to go through.

The FTC’s first argument was that acquiring Within and its  Supernatural app removed Meta’s incentive to develop a similar VR fitness service in-house. That potential in-house fitness service, the FTC’s lawsuit stated, could have helped increase competition in the VR software market.

The second argument the agency brought centered on a VR game called “Beat Saber” that Meta had obtained through an earlier acquisition. In the initial version of its lawsuit, the FTC alleged that “Beat Saber” competes with Within’s Supernatural app. “The two companies currently spur each other to keep adding new features and attract more users, competitive rivalry that would be lost if this acquisition were allowed to proceed,” the FTC stated shortly after filing the suit.

The commission later removed references to the competition between Supernatural and “Beat Saber” in its lawsuit. The move came after Meta made the argument that the two apps focus on different use cases. The FTC narrowed the focus of the litigation to its lawsuit’s first argument, which was that the deal removed Meta’s incentive to develop an in-house fitness service similar to Supernatural.

A few days ago, a federal court sided with Meta in the case. The court stated in its 65-page ruling that the FTC provided insufficient evidence to establish the acquisition of Within will negatively impact market competition.

When it first announced the acquisition in 2021, Meta stated that Within would become part of its Reality Labs division. Reality Labs is responsible for developing the company’s Oculus line of VR headsets. Meta stated that Within will not only build new software following the deal, but also explore ways of adding improved support for fitness apps to VR hardware products.

The FTC is currently pursuing a separate antitrust case against Meta that focuses on the company’s earlier acquisitions of Instagram and WhatsApp. In the lawsuit, the FTC charges that the acquisitions made the social media market less competitive. The FTC is reportedly seeking an injunction that would require Meta to spin off Instagram and WhatsApp.

Image: Meta