FTC appeals court’s ruling that allowed Microsoft’s Activision acquisition

The Federal Trade Commission of the United States continues its efforts to challenge Microsoft’s proposed acquisition of Activision Blizzard for $68.7 billion by appealing a recent court ruling that gave the deal the green light.

The government agency sued Microsoft to block the deal in December, saying it would enable the company to ‘’suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.’’

In June, it asked a federal court to issue a preliminary injunction to block the companies from finalizing the deal before its June 18th deadline so that it could decide if it would harm competition or not.

However, on Tuesday, U.S. District Judge Jacqueline Scott Corley in San Francisco rejected the agency’s request, saying it failed to show that the deal would be anticompetitive.

“The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets,” the judge said.

As reported by Reuters, the FTC is now challenging the ruling with an emergency motion filed on Thursday, and asking the Ninth Circuit Court of Appeals or a “temporary pause” on the closing of the acquisition.

Microsoft says it’s disappointed 

Following the news, Microsoft’s Vice Chair and President Brad Smith said: “The District Court’s ruling makes crystal clear that this acquisition is good for both competition and consumers. We’re disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward.”

CMA extends its deadline to August 29

Following the lower court’s green-light for the deal, Brad Smith said that they would now focus on addressing the concerns of the UK’s Competition and Markets Authority, which also blocked the deal this April.

‘’While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA,’’ Smith said.

In a statement, the competition watchdog said it was “ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our Final Report.” 

However, it later said that the modification of the transaction could require a ‘’new merger investigation,’’ adding that its discussions with Microsoft are still at an early stage.

The CMA has extended its final deadline on the Microsoft-Activision deal to August 29.