Microsoft Triumphs in FTC Battle for Activision Blizzard

Microsoft Overcomes FTC Objections in Activision Blizzard Deal

In a major victory for Microsoft, the 9th U.S. Circuit Court of Appeals has upheld a previous ruling that cleared the way for the tech giant’s $69 billion acquisition of video game giant Activision Blizzard.

The court’s unanimous decision affirms a lower judge’s decision that the Federal Trade Commission (FTC) didn’t have enough evidence to block the deal, which officially closed in 2023. The three-judge panel found that the lower court correctly applied legal standards and that the FTC failed to demonstrate a high likelihood of success in its antitrust claims.

This legal battle has been playing out since 2022, when the FTC, the agency responsible for enforcing antitrust laws, first challenged the merger. The FTC argued that Microsoft’s ownership of Activision Blizzard would give it an unfair advantage in the gaming market, potentially harming competition for Xbox consoles and cloud-based gaming services.

Despite the FTC’s concerns, U.S. District Judge Jacqueline Scott Corley rejected the agency’s request for a temporary injunction in July 2023, stating that the FTC hadn’t proven that the merger would significantly stifle competition.

The FTC did pursue an administrative challenge to the merger, but that process was put on hold while the appeals court case was ongoing. With the appeals court now siding with Microsoft, the FTC’s chances of blocking the deal appear slim.

This acquisition marked the largest ever in the video game industry. While competition authorities in the United Kingdom ultimately gave the deal the green light, the FTC’s challenge highlighted the increasing scrutiny facing big tech mergers.