By David Shepardson
WASHINGTON (Reuters) -The Federal Trade Commission (FTC) rejected a petition filed by Facebook-parent Meta seeking the recusal of Chair Lina Khan from participating in any decision concerning the review of Meta’s proposed merger with virtual reality app maker Within Unlimited.
The FTC, which sued in July to block the deal, said without Khan's participation that it had denied the order.
U.S. Judge Edward Davila on Tuesday ruled that Meta could proceed with its acquisition, a person briefed on the matter told Reuters, confirming reports by Bloomberg News and others.
Davila granted the FTC’s request to temporarily block the closing until Feb. 7 in order to give the commission time to assess options, the source confirmed. Davila's sealed opinion has not been released publicly.
The FTC in seeking to block the deal called Facebook a "global technology behemoth," noting its ownership of popular apps such as Instagram, Messenger and WhatsApp, and said its "campaign to conquer VR" began in 2014 when it acquired Oculus, a VR headset manufacturer. Facebook agreed to buy Within in October 2021.
Meta sought Khan's recusal over prior statements about Facebook made before she joined the FTC.
Two of the FTC commissioners said in rejecting Khan's recusal: "Those statements concern a different industry, a different realm of transactions than those presented here, and, effectively, a different acquiring company."
Meta previously filed a petition to disqualify Khan from an FTC antitrust lawsuit alleging that Meta monopolized the market for personal social networking services. A U.S. judge last year ruled that Khan’s disqualification was not required.
FTC Commissioner Christine Wilson dissented from the recusal decision, pointing to Khan's prior 2017 statement urging the FTC "to ban all future Meta transactions." Wilson said that was "an express statement that Meta transactions are illegal."
(Reporting by David Shepardson; Editing by Mark Porter)