The US Federal Trade Commission (FTC) has no plans to give up on its crusade to block Microsoft’s acquisition of Activision Blizzard. Here are all the details about the appeal and the latest news related to the $68.7 billion deal.
What is known about the FTC appeal?
On July 12, the FTC announced its decision to appeal to the US Court of Appeals for the Ninth Circuit (here is the notice), challenging Judge Jacqueline Scott Corley’s ruling that greenlights Microsoft’s acquisition of Activision Blizzard in the country.
As reported by The Verge, the Commission’s arguments will remain unclear unti the full appeal is submitted to the court.
It is worth noting that the FTC is appealing the US federal court’s decision against its preliminary injunction request. The regulator has a separate lawsuit against Microsoft, with a trial still scheduled for August 2.
The FTC also needs the Ninth Circuit Court of Appeals to issue an emergency stay to extend the existing temporary restraining order (TRO) expiring at 11:59pm on July 14. It is unlikely that the court will rule that quickly, so Microsoft has a small window — between July 15 and the July 18 deadline — to close the deal without waiting for a possible new TRO.
How did Microsoft and Activision Blizzard react to the appeal?
Microsoft president Brad Smith told The Verge that the court ruling makes it clear that the merger is good for competition and consumers. “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,” he stated.
Activision Blizzard CCO Lulu Cheng Meservey noted that “the facts haven’t changed” and the company is confident that the US will remain among the 39 countries where the merger can close.
The facts haven’t changed. We’re confident the U.S. will remain among the 39 countries where the merger can close.
We look forward to demonstrating the strength of our case in court – again.
— Lulu Cheng Meservey (@lulumeservey) July 12, 2023
And Blizzard president Mike Ybarra reacted with a short tweet: “Your tax dollars at work.”
What about the UK’s Competition and Markets Authority (CMA)?
Despite Microsoft and the CMA initially agreeing to pause their legal fight, the UK regulator then suddenly warned that negotiations and adjustments to the Activision Blizzard deal could lead to a new merger investigation.
“These discussions remain at an early stage and the nature and timing of next steps will be determined in due course,” the CMA told The Verge. “While both parties have requested a pause in Microsoft’s appeal to allow these discussions to take place, the CMA decision set out in its final report still stands.”
So it looks like the CMA is in no hurry to settle things with Microsoft. Although the Activision Blizzard deal has been cleared in dozens of jurisdictions, including the European Union and (currently) the US, the UK remains the major stumbling block to completing the merger.
It is worth noting that if Microsoft decides to ignore the CMA’s decision and close the deal without addressing related concerns, there will be a risk that the company will exit the UK market.