A U.S. federal court has rejected the Federal Trade Commission’s (FTC) request to temporarily halt Microsoft’s $69 billion acquisition of video game company Activision Blizzard. The court filing stated that the FTC failed to demonstrate that the deal would be illegal under antitrust law, Reuters news report said.
The FTC had asked the court to prevent Microsoft from closing the acquisition until the 9th U.S. Circuit Court of Appeals ruled on a separate stay request. However, the federal judge ruled in favor of Microsoft, stating that the agency had not provided sufficient evidence to support its claims.
The FTC’s motion requested a swift decision on the pause, highlighting that the existing temporary restraining order on the deal was set to expire shortly.
If the deal does not receive regulatory approval by July 18, it is likely to expire, allowing either Microsoft or Activision Blizzard to walk away from the agreement unless an extension is negotiated.
Microsoft remains determined to proceed with the acquisition, with its President, Brad Smith, expressing disappointment in the FTC’s pursuit of what he referred to as a weak case. The FTC argued that the denial of a preliminary injunction by the judge raised significant issues for the Court of Appeals to resolve and claimed that granting an injunction pending appeal was necessary because the FTC is likely to succeed on appeal.
The FTC also contended that the judge erred in assessing the deal’s impact on multi-game subscriptions and the extent to which Microsoft’s agreements with competitors influenced the transaction. In an effort to address the agency’s concerns, Microsoft had agreed to license the popular “Call of Duty” franchise to rivals, including a 10-year contract with Nintendo, contingent on the merger’s completion.
The acquisition between Microsoft and Activision Blizzard, the largest in the history of the video game industry, has faced regulatory challenges, including opposition from Britain’s Competition and Markets Authority. However, this week, the authority indicated that a restructured deal could potentially resolve its concerns, subject to a new investigation.
