The loss is a stinging defeat for the F.T.C.’s chair, Lina Khan, and her broader efforts to expand the boundaries of antitrust law to better regulate the tech giants. The case was aimed at testing that line with a rarely used legal argument that Meta’s deal would hinder future competition in an undeveloped market, as opposed to a more traditional case that would focus on a mature economic area.

Ms. Khan has argued the F.T.C. should file more novel cases if it wants to properly nurture competition in the modern economy. She has acknowledged thatthe agency must be willing to lose in some of them.

The decision was also a vindication for Meta, which had argued in court that it was trying to create a platform that would be welcoming for all virtual reality apps, including those developed independently. The company has invested billions of dollars in becoming a powerhouse of the so-called metaverse, where users work, play and consume content through virtual and augmented reality. It has acquired multiple virtual reality content studios and Oculus, a company that makes the headsets people use to view that content.

Meta, which declined to comment, is scheduled to report quarterly earnings later on Wednesday. A spokesman for the F.T.C. said it was “not able to comment at this time” to respect the court’s seal order.

Bloomberg earlier reported Judge Davila’s decision.

The F.T.C. lawsuit to block the deal was the first of the cases developed entirely under Ms. Khan, a legal scholar who rose to prominence after she wrote a critique of Amazon that went viral, to be filed in court. Looking to prevent more “vertical” deals, in which the two companies don’t compete directly, the F.T.C. also challenged Microsoft’s $69 billion purchase of the video game publisher Activision Blizzard in December. This month, the Department of Justice accused Google of abusing a monopoly over the technology that places ads on websites.