A US court has denied the United States government’s Federal Trade Commission (FTC) appeal against the decision to allow Microsoft to acquire Activision Blizzard.
As reported by Bloomberg, the 9th Circuit US Court of Appeals once again sided with Microsoft and ruled in favor of Judge Jacqueline Scott Corley’s decision to deny FTC’s request to block the deal in 2023.
The Commission tried to block Microsoft’s $68.7 billion acquisition of Activision Blizzard – announced back in January 2022 – in 2023, but it was unsuccessful. In December 2023, the FTC tried to appeal against this decision, despite the fact the deal was already completed.
In yesterday’s judgement, the court decided that despite the FTC’s concerns about Microsoft’s hold on cloud gaming, it was satisfied the appeal court “applied the correct legal standards,” asserting the FTC had not proven the “likelihood of success on the merits as to any of its theories.”
“The panel held that the district court applied the correct legal standards and did not abuse its discretion, or rely on clearly erroneous findings, in holding that the FTC failed to make a sufficient evidentiary showing to establish the requisite likelihood of success on the merits of its claim,” the court ruled.
“Thus, the FTC had not raised serious questions regarding whether the proposed merger was likely to substantially lessen competition in the relevant markets.”
Comparing Microsoft’s first-party exclusives with competitors Sony PlayStation and Nintendo, the court said “all major manufacturers have engaged [in the practice of first-party exclusives],” noting both Nintendo and Sony “have significantly higher number of exclusive games on their platform than [Microsoft] does.”
Both Microsoft and the FTC declined to comment on the ruling. As noted by Bloomberg, it remains to be seen how this will impact an administrative trial in the FTC’s own in-house court, as that case had been suspended pending the outcome of this appeal. The FTC may still also appeal to the Supreme Court.
