US Appeals Court Has Finally Rejected FTC’s Case To Cancel Microsoft-Activision Deal

FTC may have finally reached the end of the line in their objections to the Microsoft Activision deal.

We know that seems to be a strange thing to report, over a year and a half after Microsoft already finalized their acquisition, with Activision’s Call of Duty: Black Ops 6 already leading the company’s gaming division to what seems to be the biggest success that they have ever seen in their existence. But the FTC still had an appeal going in US appeal courts for their case for an injunction to block this deal.

This decision also comes four months after the FTC head that moved forward with both this injunction and appeal, Lina Khan, had herself resigned from the FTC. Of course, even if everything about this case already seems pointless, the courts have an obligation to provide a ruling.

As reported by Reuters, the appeals court has rejected the FTC appeal, affirming the original decision from California judge Jacqueline Scott Corley to also reject the request for injunction. The court provided this summary explanation for their decision:

The panel affirmed the district court’s denial of a motion by the Federal Trade Commission (“FTC”) for preliminary injunctive relief against Microsoft’s acquisition of the video game developer Activision Blizzard, Inc.

The merger is the subject of an administrative proceeding that remains pending before the FTC. In its administrative complaint and in seeking a preliminary injunction in the district court, the FTC asserted that the merger would likely violate of the Clayton Act because, viewing the merger as a vertical integration between a content-platform operator and a content producer, competition would be substantially lessened in the relevant U.S.-based content-platform markets for gaming console devices, gaming subscription services, and gaming cloud-

streaming services.

The panel held that the district court applied the correct legal standards and did not abuse its discretion, or rely on clearly erroneous findings, in holding that the FTC failed to make a sufficient evidentiary showing to establish the requisite likelihood of success on the merits of its claim. Thus, the FTC had not raised serious questions regarding whether the proposed merger was likely to substantially lessen competition in the relevant markets.

For those who are curious, you can read through the whole decision here and see that the appeals court did their due diligence. Not only did they review everything that happened in the UK and EU before Microsoft finished their deal, but they also stayed updated. For example, they stated that Microsoft has yet to make good on their contract with Nintendo to release Call of Duty games on their platforms.

The decision made sure to refute the FTC’s arguments about potential violations of the Clayton Act about anticompetitive mergers and acquisitions, and refuted their claims that Judge Corley made errors in her decision. This ends all legal challenges to the deal and truly ensures the entry of a new era for Microsoft Gaming and the video game industry.