Microsoft Faces Another Hurdle in Its Bid to Acquire Activision Blizzard as FTC Decides to Put Its Foot Down

On December 8, 2022, the FTC filed a lawsuit against Microsoft for wanting to acquire gaming powerhouse, Activision Blizzard for a staggering amount of $69 billion. FTC’s point was that this deal would result in the degradation of Activision’s gaming qualities and pricing differences as well as lead to Microsoft’s monopoly in the gaming industry.

This legal feud has taken a huge turn as FTC lost the case, but to stop the deal, they filed an appeal to revoke the judge’s decision.

FTC Challenges Judge Corley’s Decision – Microsoft Stumbles

Earlier this week, Judge Jacqueline Scott Corley ordered to deny a preliminary injunction against Microsoft’s $69 billion deal with Activision Blizzard. This was a huge win for Microsoft. On Thursday, the FTC lodged an appeal with the Ninth Circuit Court of Appeals against Judge Corley’s ruling in favor of Microsoft’s acquisition of Activision Blizzard.

FTC stated in support of their appeal that the court applied an incorrect legal standard. They also argued that this deal would result in potential consumer harm, which the Court has failed to identify. They addressed the concerns regarding potential foreclosure strategies if the deal happens.

Uncertainty Surrounds Deal Deadline and UK Regulator’s Concerns

FTC has appealed against the judge’s decision. But their effort to stop the merger deal doesn’t end here. If the court extends the ongoing temporary restraining order, only then, the merger deal can be halted. The ongoing TRO will expire on Friday, July 14th, at 11:59 PM.

It’s uncertain when will the appeals court rule. It may come after the deal deadline which is on July 18th. So, if the restraining order doesn’t continue then Microsoft will have potentially 4 days to close the deal, as there will be no further restraining order in place.

As FTC has appealed to the judge’s decision, they will be hoping that the Ninth Circuit Court of Appeals will issue an emergency stay for extending the existing temporary restraining order. The existing restraining order is expiring at 11:59 PM on Friday, July 14th. The appeals court’s ruling may not come before the deal deadline which is July 18th. So, that means they can close the deal in the absence of the restraining order.

Read More: Judge Refutes FTC’s Claim That Nintendo Switch Is Not a Direct Competition to PlayStation 5 and Xbox

The appeal is not the only thing that Microsoft should be worried about. UK’s Competition and Markets Authority is another obstacle that Microsoft has to overcome. The CMA, which had previously raised concerns about cloud gaming, warns that the deal’s restructuring could trigger a new merger investigation.

As things stand, despite winning the legal battle, Microsoft has again stumbled in acquiring Activision. Not only the FTC’s appeal, UK’s CMA has also made things complex for Microsoft. As this merger deal hangs in a needle, the Ninth Circuit Court of Appeals and the CMA’s decisions will verdict the $69 billion deal.

Watch this Story: Microsoft Stock Goes Up Following Court Win Over FTC