Microsoft Triumphs in FTC’s Appeal, Securing $69 Billion Activision Blizzard Acquisition
In a significant legal win for Microsoft, a federal appeals court ruled on May 7, 2025, to reject a challenge by the Federal Trade Commission (FTC) aimed at blocking the company’s $69 billion acquisition of Activision Blizzard. The 9th U.S. Circuit Court of Appeals, based in San Francisco, upheld a lower court’s ruling, which had previously declined to grant a preliminary injunction sought by the FTC. This ruling supports Microsoft’s ongoing purchase of the gaming giant behind the “Call of Duty” franchise, which closed in 2023.
The FTC had filed a lawsuit in 2022, arguing that the merger would harm competition in the gaming market by giving Microsoft an unfair advantage over its rivals, particularly in cloud gaming and console sales. The agency feared the merger would harm competitors to Microsoft’s Xbox console and subscription services. However, the appeals court found that the FTC did not demonstrate a strong likelihood of success in proving that the deal would significantly reduce competition.
The three-judge panel unanimously sided with the lower court’s decision, ruling that the FTC had not provided sufficient evidence to justify blocking the deal. The ruling emphasized that the FTC had failed to show that Microsoft’s acquisition of Activision Blizzard would result in a substantial lessening of competition in the relevant markets. The decision also noted that the FTC had failed to meet the necessary legal standards required for a preliminary injunction.
The Activision Blizzard acquisition has faced scrutiny from regulators worldwide, but it has secured approval from competition authorities in various jurisdictions, including the UK. Despite opposition from the FTC and other regulators, the deal was finalized in 2023. This approval marked a historic moment in the video game industry, with the $69 billion transaction becoming the largest-ever acquisition in the sector.
Following this latest legal setback, the FTC has not yet indicated its next move. The agency had also filed an administrative challenge to the merger, which was temporarily put on hold in 2023. As Microsoft integrates Activision Blizzard into its gaming portfolio, the legal battle over this acquisition is expected to continue, with broader implications for antitrust enforcement in the tech and gaming industries.
Source: Reuters