Topline
The Federal Trade Commission pressed Microsoft once again Wednesday, filing a notice to appeal a federal district judge’s ruling that gave Microsoft the green light to acquire Activision Blizzard for $69 billion—one day after the tech giant scored its major legal win.
Microsoft announced in January 2022 its plans to acquire video game company Activision Blizzard. … [+]
Key Facts
The appeal will be made against Judge Jacqueline Scott Corley’s denial of the FTC’s request for a preliminary injunction, which would have temporarily blocked Microsoft from closing its massive deal.
The full appeal will be filed with the Ninth Circuit Court of Appeals, which has the power to extend the temporary restraining order on the deal, but there’s little time to keep it from closing, as the order blocking the deal will expire Friday.
Microsoft’s agreement with Activision Blizzard, meanwhile, expires July 18—a date that, if reached, will force Microsoft to ask Activision Blizzard for an extension or fork over $3 billion for a reverse termination fee.
It is unclear if the appeals court will make its ruling before the deal deadline arrives.
What To Watch For
Microsoft must also get approval from the U.K.’s Competition and Markets Authority before the July 18 deadline, which paused its litigation with Microsoft Tuesday to negotiate a resolution.
Chief Critic
“I’d be surprised if they would waste taxpayer resources on something like that,” Activision Blizzard CEO Bobby Kotick told CNBC Wednesday, referring to the FTC appeal.
Key Background
Activision Blizzard develops massive gaming titles such as Call of Duty, World of Warcraft, Diablo, Candy Crush and more. Microsoft’s intent to acquire the video game juggernaut was first announced in January last year and has since dealt with months of scrutiny from regulators in the U.S. and abroad. The FTC sued Microsoft in December and alleged its acquisition of Activision Blizzard could harm competitors through withheld content, pricing differences or by degrading the quality of Activision Blizzard’s games on other platforms. When Corley ruled in favor of Microsoft’s deal Tuesday, she wrote that the company’s commitment to keeping Call of Duty on Sony’s PlayStation console for the next decade, and opening it up to the Nintendo Switch, should relieve concerns about unfair competition levied by Microsoft’s chief gaming console competitors. Kotick said in a statement that the merger would promote competition instead of allowing “entrenched market leaders to continue to dominate our rapidly growing industry.”
Further Reading
Microsoft Can Close $69 Billion Activision Blizzard Merger, Judge Rules (Forbes)
Activision Blizzard Stock Surges 11% After Judge Allows Microsoft Merger (Forbes)
Source: https://www.forbes.com/sites/antoniopequenoiv/2023/07/12/ftc-appeals-ruling-letting-69-billion-microsoft-activision-deal-close/