FTC loses appeals court bid to temporarily block Microsoft-Activivision deal

  • An appeals court has denied a request for injunctive relief from the Federal Trade Commission challenging Microsoft’s acquisition of game publisher Activision Blizzard.
  • Microsoft is still working to resolve the issues with regulators in the United Kingdom.
  • The companies want to finalize their deal by July 18.

Satya Nadella, CEO of Microsoft

CNBC

In Microsoft’s victory, the US Court of Appeals for the 9th Circuit late Friday refused The Federal Trade Commission is appealing a judge’s ruling that would have blocked the software maker’s $68.7 billion acquisition of video game publisher Activision Blizzard.

Microsoft is still working to address concerns about the transaction from the United Kingdom’s Competition and Markets Authority. Both companies plan to close the deal by July 18.

A federal judge in San Francisco ruled against the FTC on Tuesday after five days of court hearings, and the federal agency filed its appeal on Wednesday.

The FTC first sued to block the acquisition last December, then applied for an emergency injunction last month ahead of the deal’s July 18 deadline. The FTC argued that the transaction was anti-competitive because Microsoft could develop certain games exclusive to its own Xbox game consoles or dilute the experience of Activision games such as the popular Call of Duty titles if the deal ends. Microsoft has instead said it will make the games more widely available.

In an emergency motion filed Thursday with the 9th Circuit, the FTC said the district judge “applied the wrong legal standard by denying preliminary relief: the court required the FTC to prove its entire case to the arbitrator as to the legality of the merger.” The company sought a temporary stay while the court considered an appeal of the district court’s decision.

Under Lena Khan’s leadership, the FTC has lost other battles with tech companies, including an attempt to block virtual reality fitness startup Meta from buying platforms.

Representatives for the FTC and Microsoft did not immediately respond to requests for comment on the ruling.

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