The Federal Trade Commission (FTC) is taking legal action to temporarily halt Microsoft Corp.’s acquisition of Activision Blizzard Inc. In response to a recent ruling that approved the deal, the FTC has requested a postponement from U.S. District Judge Jacqueline Scott Corley. However, the judge promptly denied the request. Consequently, the FTC has now appealed to the Ninth U.S. Circuit Court of Appeals in San Francisco to pause the acquisition temporarily while the case is under review.
Misapplication of Legal Standards
According to the FTC filing, the judge improperly applied legal standards when considering the preliminary injunction request made by the FTC. In addition to this, the filing states that the judge made several errors in other aspects of the case.
Serious Consequences for the Public Interest
Regulators argue that allowing the deal to proceed will cause irreparable harm to both the public interest and the FTC. The acquisition is set to close in the coming days, and the FTC’s urgent plea aims to preserve the status quo until their appeal can be thoroughly reviewed.
Microsoft Responds: FTC Failed to Provide Convincing Evidence
Microsoft has filed a response with the court, asserting that the FTC has failed to meet its burden of proof with independent and fact-based grounds. Microsoft further criticizes the FTC for dragging its feet before filing an appeal. The tech giant argues that ordering an injunction now, after the court has already deemed it inequitable, could potentially derail the merger.
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Microsoft’s Xbox and Activision Merger Face FTC Opposition
The Federal Trade Commission (FTC) has raised concerns about the merger of Microsoft’s popular videogame platform, Xbox, with major videogame publisher Activision. The FTC argues that this tie-up, which includes popular titles like “Call of Duty,” could have negative impacts on both the videogame industry and consumers.
Despite these concerns, Microsoft has assured that “Call of Duty” will remain available on Sony’s PlayStation console for the next 10 years. Furthermore, the company plans to make the game accessible on Nintendo’s Switch and certain cloud-gaming platforms.
In response to a recent court ruling by Judge Corley, the FTC has filed a notice expressing its intent to appeal. However, Judge Corley deemed that the FTC did not provide sufficient evidence to prove that this specific merger would substantially lessen competition within the industry.
FTC Chair Lina Khan faced criticism from Republican lawmakers during her testimony on Capitol Hill. These lawmakers questioned her agency’s actions and highlighted its recent court losses in attempting to block the Microsoft-Activision merger and Meta’s acquisition of a virtual-reality gaming company earlier this year.
