The US Federal Trade Commission (FTC) has filed an appeal to overturn the court ruling that approved Microsoft’s planned acquisition of Activision Blizzard. In July 2023, a US District Court judge determined Microsoft could legally acquire Activision Blizzard, on the basis of its commitments to ensuring multi-platform accessibility for Call of Duty, and its support for cloud gaming companies.
‘The Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition,’ judge Jacqueline Scott Corley said in the official court ruling. ‘To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content.’
The FTC had originally filed the court case as a means to block the Microsoft merger, due to concerns about a loss of competition in the global games industry, and the deal’s potential ripple effect. With its newly-filed appeal, the organisation hopes to press its case further.
Notably, the deal for Microsoft to acquire Activision Blizzard is set to expire on 18 July 2023 – and it’s unlikely the FTC’s appeal will be completed in this timeframe. Microsoft is also still contending with the UK Competition and Markets Authority ruling, which blocked the planned merger in the United Kingdom. Failure to close the deal by its deadline may mean Microsoft is required to renegotiate with Activision Blizzard.
The next steps for the merger remain unclear. Beyond contending with the FTC appeal, which may be a drawn-out process, Microsoft is also reportedly negotiating with the CMA to come up with a mutually-agreeable solution to passing the merger in the UK.
Expect to hear more about this unfolding legal battle in the coming weeks.
Update 13/7/23: In response to the FTC decision to appeal the US District Court ruling, Microsoft vice chair and president Brad Smith has committed to defending the company’s position.
‘The District Court’s ruling makes crystal clear that this acquisition is good for both competition and consumers,’ Smith said, in a statement provided to GamesHub. ‘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.’