A federal appeals court has dismissed a legal challenge regarding the Federal Trade Commission’s (FTC) $69 billion acquisition of Activision Blizzard, known for the “Call of Duty” franchise. This decision was issued on Wednesday.
The U.S. Circuit Court of Appeals in San Francisco upheld a lower court’s ruling, which asserted that the FTC lacked justification for an interim injunction to block contracts finalized in 2023.
The three-judge panel unanimously found that the lower court had applied the appropriate legal standards, emphasizing that the FTC did not prove a substantial likelihood of success in arguing that the merger would reduce competition.
An FTC spokesperson chose not to comment, and Microsoft has yet to respond to requests for input.
In related news, Microsoft has concluded its Skype service after 22 years, redirecting users to Microsoft Teams. This move came amid an antitrust lawsuit that the FTC filed against Microsoft in 2022.
As the agency implementing antitrust laws, the FTC has been questioning the merger through separate internal reviews, a process that was paused under President Biden’s administration in 2023 until the Ninth Circuit made further decisions.
This Activision Blizzard deal is noteworthy as it represents the largest acquisition in the video game industry. Its conclusion came at the end of 2023 after securing approval from UK competition regulators, though it faced regulatory examination from various global jurisdictions.
While the FTC aimed to halt the Activision deal, it pursued administrative challenges instead.
The FTC contended that the partnership between Microsoft and Activision would enable the combined entity to sidestep competition in Xbox consoles, subscription services, and cloud gaming.
In July 2023, U.S. District Judge Jacqueline Scott Corey denied the FTC’s request to obstruct the acquisition, noting that the FTC had indicated that Microsoft’s ownership of Activision could diminish competition within video game subscription services and cloud gaming.
The FTC, in its appeal, alleged that it had applied an excessively stringent standard in determining whether to grant a preliminary injunction.
