FTC Loses Appeal on Microsoft’s Acquisition of Activision Blizzard

The FTC has faced a setback in its efforts to block Microsoft’s $68.7 billion acquisition of Activision Blizzard. A panel from the Court of Appeals has upheld the earlier decision denying the FTC’s request for an injunction that would prevent Microsoft from completing the deal. This ruling marks a significant moment, nearly two years after the acquisition was first announced in 2021.

Originally, the FTC brought forth a complaint in 2022, arguing that Microsoft’s ownership of Activision’s content could lead to anti-competitive practices. They expressed concerns that Microsoft might have the “ability and increased incentives to withhold or degrade Activision’s content” which could negatively impact competition in terms of product quality, pricing, and innovation. However, a district court judge dismissed the FTC’s request for an injunction in 2023, allowing Microsoft to proceed with the acquisition in October.

Following the district court’s decision, the FTC filed an appeal. However, the appeals court panel agreed that the FTC had not adequately demonstrated a likelihood of success in any of its claims, thereby reinforcing the lower court’s decision not to grant an interim injunction.

Nonetheless, the acquisition is still under review in ongoing administrative proceedings at the FTC. Both representatives from the FTC and Microsoft have chosen not to comment on the latest developments.

This $68.7 billion deal is among the largest and most significant in the gaming sector, merging Microsoft’s gaming leg, which includes Xbox consoles and hit franchises like Halo and Minecraft, with Activision Blizzard’s vast array of popular games such as Call of Duty, World of Warcraft, and Candy Crush.

The FTC’s challenge reflects a growing trend where regulators have intensified their scrutiny of major technology mergers, especially within the gaming industry, citing concerns about potential anti-competitive effects.