The United States Federal Trade Commission has asked a federal court to halt the merger of Microsoft and Activision Blizzard. Earlier this week, the court ruled in favour of the purchase and the deal has all been signed off already. So much so that Activision is expected to be removed from the NASDAQ index in the next few days. However, the FTC has not stepped in… again.
The Federal Trade Commission has now filed an appeal and asked for an order to prevent the deal from closing. The goal of the FTC is to pause the deal and delay its completion in order to see it expire. The FTC has until 18 July. On that date, both Activision and Microsoft are no longer legally bound by sale. But both companies can extend this deadline to another date.
The FTC is standing its ground on the merger. The commission’s latest appeal claims that the court has refused to acknowledge and raise “substantial issues” highlighted in the case. Some of these issues include:
- The ruling applied the wrong legal standard, relying on government cases seeking permanent injunctions.
- It erred in saying potential consumer benefits of Xbox Game Pass outweighed the potential for foreclosure of games like Call of Duty appearing on other subscription platforms.
- It relied too much on Microsoft’s agreements to provide games to other cloud services.
- It missed potential partial foreclosure strategies — or ways that Microsoft could degrade the experience of games on other platforms without fully dropping support.
- It ignored the FTC’s evidence about Microsoft’s incentives to foreclose access to games.
Microsoft has released a statement regarding the appeal calling it disappointing. The company CEO Brad Smith says that the District Court’s ruling makes crystal clear that this acquisition is both good for competition and consumers.
“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.”
We will likely have an update later today on the matter. However, it seems like the court will dismiss the appeal. The FTC might find another route to try and pause the merger.