Barbara
**FEDERAL TRADE COMMISSION APPEALS COURT ORDER ALLOWING MICROSOFT’S ACQUISITION OF ACTIVISION BLIZZARD**
The Federal Trade Commission (FTC) has announced its decision to appeal a recent US federal court order that cleared the way for Microsoft to acquire Activision Blizzard. The FTC has filed a notice of appeal to challenge Judge Jacqueline Scott Corley’s ruling, but the full arguments will only be known when the appeal is submitted to the Ninth Circuit Court of Appeals.
In a grueling battle with the FTC earlier this week, Microsoft emerged victorious when a federal judge denied the regulator’s request for a preliminary injunction. Judge Corley stated that the FTC had not provided sufficient evidence to support its claim that this specific merger in the gaming industry would lead to significant competition reduction. On the contrary, the judge argued that the evidence suggested that the merger would provide consumers with increased access to Call of Duty and other Activision content.
Had the preliminary injunction been granted, it would have temporarily halted Microsoft from finalizing the Activision Blizzard deal until the outcome of the FTC’s administrative case against the company. This separate legal challenge is still scheduled to begin on August 2nd.
With the FTC’s decision to appeal Judge Corley’s ruling, the regulator now seeks an emergency stay from the Ninth Circuit Court of Appeals to extend the existing temporary restraining order, which is set to expire on July 14th. It remains uncertain whether the appeals court will make a ruling before the deal deadline on July 18th, potentially allowing Microsoft to proceed with the acquisition without a restraining order.
Before the deal can be finalized, Microsoft also needs to address concerns raised by the UK’s Competition and Markets Authority (CMA), which previously blocked the deal due to cloud-related issues earlier this year. Following Judge Corley’s ruling, both Microsoft and the CMA agreed to pause their legal battles and enter into negotiations. However, in a surprise statement, the CMA warned on Wednesday that Microsoft’s potential restructuring of the deal could trigger a new merger investigation. The talks between Microsoft and the regulator are said to be in their early stages.
Contrary to a report by CNBC, which suggested that Microsoft and the CMA had agreed on a “small divestiture” to address cloud gaming concerns, the CMA’s statement indicates that this issue is still being examined. The proposed divestiture is likely to be specific to the UK and may involve changes to Microsoft’s Xbox Cloud Gaming services in the region.
In the EU, Microsoft’s deal includes a significant remedy that grants consumers in EU countries a free license to stream all current and future Activision Blizzard PC and console games through any cloud game streaming service of their choice. Cloud providers will also receive a free license to stream these games.
The focus now shifts to the Ninth Circuit Court of Appeals and the potential deal between Microsoft and the CMA in the UK.
**Sources:**
– FTC court order: [Link](https://storage.courtlistener.com/recap/gov.uscourts.cand.413969/gov.uscourts.cand.413969.307.0_1.pdf)
– CNBC report: [Link](https://www.cnbc.com/2023/07/11/microsoft-activision-deal-moves-closer-as-judge-denies-ftc-injunction.html)
