May 9 – A U.S. appeals court on Wednesday rejected the Federal Trade Commission’s (FTC) attempt to revive its challenge to Microsoft’s $69 billion acquisition of video game maker Activision Blizzard, dealing another blow to the regulator’s efforts to rein in Big Tech consolidation.
The 9th U.S. Circuit Court of Appeals in San Francisco upheld a district court’s earlier ruling that denied the FTC’s request to block the merger, which was completed in 2023. The unanimous decision by a three-judge panel concluded that the lower court correctly applied the law and that the FTC had not demonstrated that it was likely to prevail on claims that the merger would harm competition.
The FTC declined to comment. Microsoft did not immediately respond to a request for comment. The FTC sued Microsoft in 2022 in an attempt to block the deal, arguing that the merger would allow the tech giant to stifle competition in the console, subscription, and cloud gaming markets by limiting rival access to popular Activision titles, such as Call of Duty.
U.S. District Judge Jacqueline Scott Corley ruled in July 2023 that the FTC had failed to show that Microsoft’s ownership of Activision would “substantially lessen competition” in relevant gaming markets. The FTC appealed the decision, arguing that the judge used too high a bar for issuing a preliminary injunction.
Wednesday’s ruling comes after global regulatory scrutiny of the acquisition, which faced pushback in multiple jurisdictions before gaining approval in the UK, clearing the way for the deal’s closure in late 2023.
The FTC’s separate administrative proceeding against the merger has been on hold since last year, pending the outcome of the appeals process. It remains unclear whether the agency will continue to pursue that case following the latest ruling. The acquisition of Activision Blizzard marks the largest transaction in the history of the gaming industry and significantly expands Microsoft’s presence in the sector, especially in mobile and cloud gaming.
