Somehow, the FTC is still considering trying to stop the Microsoft – Activision deal.
As reported by Bloomberg, a source close to the agency revealed that they are leaning towards attempting an appeal, instead of accepting San Francisco, California District Judge Jacqueline Scott Corley’s decision.
They haven’t made a final decision yet, but the appeal could be filed as soon as today, July 12, 2023.
In spite of the FTC’s stubbornness in their position, their prospects for success aren’t exactly quite high. District Judge Jacqueline Scott Corley’s decision has rejected all their arguments, with Judge Corley noting that they were overly reliant on Sony’s contributions.
The problem with that, of course, is that these arguments would then be geared towards protecting Sony’s market position, instead of finding a position that would be the most favorable to consumers.
As we had reported, Judge Corley also found that Microsoft’s decision to expand the reach of Call of Duty to Nintendo and independent cloud gaming platforms went far and beyond to address the concerns raised by the transaction.
While Judge Corley’s ruling was a clear and definite win for Microsoft, the judge also made it clear that she would provide allowance so that an appeal could be rushed in time before the July 18 deadline Microsoft and Activision set to close the deal. She had particularly made this clear, so that there would be sufficient time for an appeal to be processed, and also so that there would be no complaint after the fact that she hadn’t made it possible. To be clear, either Microsoft or the FTC could have filed that appeal, dependent on where the decision went.
We turn now to Florian Mueller to share his commentary on the chances of this appeal prospering. As he explains:
“The FTC obviously has the right to appeal, but I hope that after they’ve studied the district court’s ruling, they’ll find that there are too many hurdles they can’t overcome. There are better priorities for their fight for competition and innovation than this “lost cause”.
The FTC would have until midnight on Friday to get the appeals court to block the deal. An emergency motion by the FTC would be opposed by Microsoft. There would be strong arguments against granting the FTC emergency relief.
The FTC can do better than that.”
While we cannot discount the possibility completely, it seems highly unlikely now that the FTC can still pull off such an appeal, given they failed to already convince a district judge, and they would have to convince the appeals court that the judge made mistakes, on top of providing new arguments to bolster their decision.
With the CMA also deciding to negotiate with Microsoft, it seems we truly have the end in sight for all this regulation, and the deal could be finalized between today and the deadline on July 18.
