Microsoft wins appeal in FTC’s challenge to $69 Billion Activision Blizzard deal

A U.S. federal appeals court has rejected the Federal Trade Commission’s attempt to block Microsoft’s $69 billion acquisition of Activision Blizzard, the video game publisher behind Call of Duty.

The Ninth U.S. Circuit Court of Appeals, based in San Francisco, upheld a lower court’s decision, ruling that the FTC was not entitled to a preliminary injunction against the merger, which officially closed in 2023. A panel of three judges unanimously agreed that the original judge applied the correct legal standards and concluded that the FTC had not shown a strong enough case to prove the deal would reduce competition.

The FTC has not commented on the outcome, and Microsoft has yet to respond to media requests.

The legal battle stems from an antitrust lawsuit the FTC filed in 2022. At the time, the agency argued that Microsoft’s acquisition of Activision could harm competition by giving the tech giant control over blockbuster games that could influence the console, cloud, and subscription-based gaming markets.

While that legal challenge played out in the courts, the FTC also initiated a separate administrative process to review the deal. However, that proceeding was paused in 2023, under President Joe Biden’s administration, awaiting the appeals court’s ruling.

Read More: Illegal betting syndicates continue to hijack government websites, sparking regulatory crisis The FTC has not commented on the outcome, and Microsoft has yet to respond to media requests.

This acquisition is the largest in video game industry history and underwent intense scrutiny from global regulators. It only went ahead after the UK’s competition authority approved the deal in late 2023, clearing one of the final hurdles.

The FTC had sought a temporary block on the acquisition, hoping to delay the merger until its full administrative challenge could be resolved. But in July 2023, U.S. District Judge Jacqueline Scott Corley declined to grant the injunction. She ruled that the FTC failed to demonstrate that the acquisition would significantly harm competition in markets such as cloud gaming and subscription-based game libraries.

In its appeal, the FTC claimed that the judge had set too high a bar when deciding whether to issue the injunction. However, the appeals court disagreed, concluding that the FTC’s arguments didn’t meet the necessary standard.

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