After facing intense regulatory challenges, Microsoft has successfully overcome the FTC's appeal, securing its US$69 billion deal with Activision Blizzard.
Microsoft has overcome another legal obstacle in its US$69 billion takeover of Activision Blizzard, after a US federal appeals court rejected the Federal Trade Commission’s (FTC) attempt to block the deal.
According to a report by Reuters, The 9th US Circuit Court of Appeals in San Francisco upheld a lower court’s decision to deny the FTC a preliminary injunction. A panel of three judges ruled unanimously that the agency had not shown the merger would seriously harm competition in the gaming industry.
The FTC filed its lawsuit in 2022, arguing that Microsoft’s purchase of the Call of Duty publisher would give it too much control in console gaming, as well as in the growing subscription and cloud markets. But in July 2023, US District Judge Jacqueline Scott Corley ruled that the agency hadn’t made a convincing case, and allowed the deal to proceed.
The FTC appealed, claiming the judge had set the bar too high when weighing whether to pause the deal. The appeals court disagreed, saying the right legal test had been applied.
Microsoft cleared other major legal hurdles to finalise Activision Blizzard merger
Regulators around the world have been closely watching the merger since it was announced in early 2022. Sony, one of Microsoft’s biggest gaming rivals, argued that the deal could lead to Call of Duty being pulled from PlayStation platforms in the future. However, Microsoft has publicly committed that it will keep Call of Duty on PlayStation “as long as there is a PlayStation out there.”
The FTC took a similar view, warning that Microsoft could use Activision’s titles to squeeze out competition in console sales and newer gaming markets. They also warned that the deal could give Microsoft undue power in the console, subscription, and cloud gaming markets. But Judge Corley wasn’t convinced and ruled that the agency hadn’t shown enough to prove the deal would damage competition.
Microsoft completed the acquisition in late 2023, after it secured final approval from the UK’s Competition and Markets Authority. It remains the biggest deal in video game history, and faced scrutiny from regulators in several other countries. Meanwhile, the FTC’s separate administrative challenge was put on pause in 2023 pending the outcome of the federal appeal.
The agency declined to comment on the latest ruling. Microsoft has not yet responded publicly.
