FTC Fights Back: Appeal Filed Against Court's Approval of Microsoft's Activision Blizzard Buyout

The US Federal Trade Commission (FTC) has taken a significant step by appealing the recent court order that allowed Microsoft to proceed with its proposed acquisition of Activision Blizzard.

Earlier this week, a federal judge rejected the FTC’s request for a preliminary injunction, asserting that the commission had failed to provide sufficient evidence to demonstrate that the deal would “substantially lessen competition.”

An Added Hurdle: The FTC’s Appeal

The FTC’s decision to appeal introduces a new obstacle in the path of the buyout, which currently has a deadline of July 18th. Once the expiration date passes, Microsoft and Activision Blizzard will have the option to either proceed with the merger, terminate the agreement, or negotiate an extension—though an extension seems more likely.

Microsoft President Brad Smith responded to the appeal, emphasizing, “The District Court’s ruling unequivocally affirms that this acquisition is beneficial for both competition and consumers.” He expressed disappointment with the FTC’s continued pursuit of what he considers a weak case and vowed to oppose further attempts to delay the process, affirming Microsoft’s commitment to moving forward.

Activision Blizzard’s Chief Corporate Affairs Officer, Lulu Cheng Meservey, took to Twitter to comment on the appeal. She stated, “The facts haven’t changed,” expressing confidence that the merger will ultimately be approved in the United States, as it has already received approval from 39 other countries. Meservey highlighted that while the FTC may change the venue, the underlying facts remain the same.

Mixed Global Reactions to the Deal

Among the 39 countries that have given their approval for the Microsoft-Activision Blizzard acquisition are Japan, China, and the European Union’s regulatory body, which stated that the deal would bring about significant improvements in cloud gaming.

Notably, the UK’s Competition and Markets Authority (CMA) prevented the merger; however, Microsoft and the British regulator are currently in negotiations to explore potential restructurings of the deal.

The appeal from the FTC introduces further complexity to the acquisition process, as both Microsoft and Activision Blizzard navigate the regulatory landscape and address concerns raised by different regulatory bodies. The outcome of the appeal will have significant implications for the future of this high-profile deal, with potential ramifications for the gaming industry as a whole.

Tags: Activision Blizzard FTC Microsoft Corporation