The Federal Trade Commission is not giving up on its bid to prevent Microsoft from closing its $68.7 billion acquisition of game publisher Activision Blizzard, CNBC reported. On Wednesday, the agency filed to appeal a federal judge’s decision to deny a request for a preliminary injunction that would have prevented the deal from closing.
The decision comes one day after Judge Jacqueline Scott Corley, at the U.S. District Court for the Northern District of California, ruled in favor of the two companies.
According to CNBC, on Wednesday Activision Blizzard CEO Bobby Kotick told CNBC’s Julia Boorstin, “I’d be surprised if they would waste taxpayer resources on something like that,” referring to an FTC appeal. Kotick said he didn’t think the appellate court would grant a stay.
The FTC declined to comment on its legal response to the judge’s decision.
“The District Court’s ruling makes crystal clear that this acquisition is good for both competition and consumers,” Brad Smith, Microsoft’s president and vice chair, said in a statement. “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.”
CNBC also reported that the software maker is also trying to secure approval for the deal in the United Kingdom. Microsoft executive Brad Smith said the company and Activision Blizzard have agreed with the country’s Competition and Markets Authority that a stay of litigation would be beneficial.
The Hollywood Reporter wrote that a temporary restraining order, which was granted before a weeklong mini trial to decide whether the FTC should be granted a preliminary injunction, was issued in June to keep Microsoft from closing the transaction. It’s set to expire on Friday at midnight US West Coast time unless the US 9th Circuit Court of Appeals grants an emergency stay.
According to The Hollywood Reporter, the merger, if it closes, will make Microsoft one of the largest video game developers in the world. It will absorb over 15,000 employees from Activision, though there will likely be layoffs. The company has promised to increase access to Activision titles, including a 10-year deal to bring Call of Duty to the Nintendo Switch.
It also agreed to license games to any competing cloud service providers to secure approval from European regulators. Notably, Microsoft made one of ZeniMax’s regulators most popular titles, Starfield, exclusive to Xbox and Windows after assuring competition regulators that it wouldn’t limit games on rival consoles to get a deal to acquire the video game publisher greenlit.
The Verge reported that The Federal Trade Commission says it is appealing a recent US federal court order that cleared the way for Microsoft to purchase Activision Blizzard. The FTC filed a notice that it’s appealing Judge Jacqueline Scott Corley’s decision, but we won’t know the regulator’s arguments until the full appeal is submitted to the Ninth Circuit Court of Appeals.
According to The Verge, if the preliminary block had been granted, it would have temporarily blocked Microsoft from closing its Activision Blizzard deal until the result of the FTC’s own administrative case against the company. That separate legal challenge is due to commence on August 2nd.
In my opinion, it is good that Judge Corley supported Microsoft instead of the FTC, who appears to have presented a rather flimsy case. Despite that, the FTC now wants to prolong this situation by trying to convince the 9th Circuit Court of Appeals to reverse the decision. That’s disappointing.