FTC Appeals Against Court’s Decision on Microsoft Activision Blizzard Case

The Federal Trade Commission has announced that it will appeal the federal verdict that exempted Microsoft from an injunction.

  • The Federal Trade Commission (FTC) filed an appeal in the Activision Blizzard merger case following a US Court verdict in favour of Microsoft.
  • According to The Verge, the FTC’s court filing on the appeal included no details.
  • The spotlight now shifts towards the Ninth Circuit Court of Appeals and Microsoft’s potential deal with the CMA in the United Kingdom.

The Federal Trade Commission is not giving up on its attempt to stop Microsoft’s $68.7 billion acquisition of game producer Activision Blizzard. The commission filed an appeal on Wednesday against a San Francisco judge’s decision to refuse a request for a preliminary injunction, which would have prevented the deal from closing.

The legal complaint comes after the FTC’s failed attempt to stop the merger on the grounds that it would hurt competition by giving Microsoft exclusive control over prominent video game titles such as “Call of Duty.” 

The FTC has stated that the contract is anti-competitive because Microsoft may make certain of its games exclusive to its own game consoles or reduce the experience of Activision games on competing services if the deal is terminated. 

Also Read: Sony Accidentally Reveals Call of Duty Revenue Data and $200 Million Developments of The Last of Us 2, Horizon Forbidden West

FTC Will Appeal Ruling Letting $69 Billion Microsoft-Activision Deal Closemicrosoft

US District Judge Jacqueline Scott Corley ruled on Tuesday that she will not prevent Microsoft from concluding the deal, as requested by the FTC. The FTC asked for a preliminary injunction while a second legal challenge to the merger is being heard in the agency’s internal administrative court.

If the preliminary injunction had been granted, Microsoft would have been prevented from finalising the Activision Blizzard transaction pending the outcome of the FTC’s own administrative lawsuit against the corporation. The other legal action is still scheduled to begin on August 2nd.

The decision on Tuesday cleared the way for Microsoft to potentially finish the transaction with Activision in a matter of days, ahead of a contractual deadline of 18 July. Alternatively, the corporations might work together to extend that deadline.

Now that the FTC has decided to appeal Judge Corley’s judgement, the agency needs an emergency stay from the Ninth Circuit Court of Appeals to prolong the existing temporary restraining order (TRO), which is slated to expire at 11:59 p.m. PT on Friday,14 July. It’s unclear if the appeals court will rule before the contract deadline (18 July), potentially leaving the door open for Microsoft to conclude the Activision Blizzard transaction on Monday or Tuesday without a restraining order.

Reacting to the appeal, Microsoft’s president, Brad Smith reacted: “We’re disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward.”

If Microsoft does not finalise the purchase by July 18, the platform owner will be entitled to pay Activision Blizzard $3 billion and renegotiate the agreement.

While the merger has been approved in the US and the European Union, despite an FTC challenge in August, Microsoft still has to win over the UK. Following the US court victory, Microsoft said that it has been granted permission to propose a modified acquisition that will satisfy the UK regulator’s concerns, following the UK regulator’s decision to deny the merger earlier this year.

An appeal against this verdict was due on July 24, but both Microsoft and the CMA have requested that proceedings be halted while the former works on its new proposals.

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