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FTC's Fight Against Microsoft/Activision Deal Is Back From the Dead

The FTC filed for an appeal this week after Judge Jacqueline Scott Corley ruled in favor of Microsoft earlier this week.

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Shortly after a judge denied the Federal Trade Commission’s injunction to block Microsoft’s acquisition of Activision Blizzard on Tuesday, the FTC has now turned to an appeals court to stop the $69 billion deal once again.

The FTC filed an appeal on Wednesday and an emergency motion on Thursday with the Ninth Circuit Court of Appeals in San Francisco, according to Reuters. The commission is seeking a prompt response from the court as, under the terms of Tuesday’s decision by Judge Jacqueline Scott Corley for District Court for the Northern District of California, the FTC only had until Friday evening to file this appeal. Microsoft indicated to Reuters that it intends to fight the FTC’s request.

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“The District Court’s ruling makes crystal clear that this acquisition is good for both 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.” said Microsoft Vice Chair and President Brad Smith in a statement emailed to Gizmodo.

In her decision in favor of Microsoft on Tuesday, Judge Corley wrote that the acquisition deal “deserves scrutiny” but that Microsoft has committed to not restricting access to games like Call of Duty while agreeing to bring Activision’s portfolio of games to cloud-based gaming platforms. If the FTC does not file an appeal, the commission’s injunction will be null and void.

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“This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action. For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition,” Judge Corley wrote in the Tuesday ruling. “To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.”

The FTC announced the move to block the deal back in December. Led by big tech opponent Lina Kahn, the FTC argued that the deal would allow Microsoft to suppress competitors from accessing the Xbox platform. The commission pointed to Microsoft’s previous acquisition of ZeniMax Media—the parent company of game studio Bethesda Softworks—in 2021 for $7.5 billion, which saw Bethesda set several high-profile game titles, including Starfield and Redfall, as Xbox exclusives. It wasn’t until last month that the FTC actually filed for the injunction.

Update July 14, 1:20 p.m. EST: This article was updated to include comments from Microsoft.