A federal appeals court on Wednesday rejected a legal challenge by the Federal Trade Commission to Microsoft’s $69 billion purchase of “Call of Duty” maker Activision Blizzard, Reuters reported.

The San Francisco-based 9th Circuit Court of Appeals upheld a lower judges order that said the FTC was not entitled to a preliminary injunction blocking the deal, which closed in 2023.

A three-judge panel unanimously ruled that the lower judge had applied the correct standards and said the FTC had not shown it was likely to succeed on its claims that the merger would restrict competition.

A spokesperson for the FTC declined to comment. Microsoft did not immediately respond to a request for comment.

The decision came in an antitrust lawsuit filed by the Federal Trade Commission in 2022 against Xbox maker Microsoft. 

The FTC, which enforces antitrust law, separately challenged the merger in an internal administrative action. That proceeding was placed on hold in 2023 during President Biden’s administration, pending the 9th Circuit’s decision.

The Activision Blizzard transaction marked the largest-ever acquisition in the video gaming market. The deal closed in late 2023 after competition experts in the UK approved it. The purchase also faced regulatory scrutiny in other international markets. 

The FTC’s lawsuit sought an order freezing the Activision transaction while the agency pursued its administrative challenge.

The agency claimed that the Microsoft-Activision tie-up would allow the merged company to fend off competitors to the Xbox console and to its subscription and cloud based gaming business.

XboxEra  reported: A federal court today has rendered a verdict on an appeal the FTC filed requesting an injunction against the Microsoft acquisition of Activision Blizzard.

The 9th U.S. Court of San Francisco has upheld the ruling of a lower court judge that stated the FTC was not entered to a preliminary injunction. The FTC was attempting to stop Microsoft from Acquiring Activision Blizzard King. The deal was finalized back in 2023, showing how long the wheels of justice can take to our turn in America.

After nearly 2 years of regulatory back and forth between Microsoft, Activision, Sony, and several other gaming companies and government agencies, Microsoft announced today that they have officially acquire Activision-Blizzard-King.

With ABK now under Microsoft, the company is the proprietor of a bounty of valuable IP, including Call of Duty and Diablo. Comments by CEO of Microsoft Gaming Phil Spenser suggest interest in reviving dormant IP in the Activision-Blizzard vault as well.

These comments suggest the company may look to extract as much value as possible from their recently approved purchase that will undoubtedly help the growth of their gaming subscription Game Pass.

Microsoft said Wednesday it will retain the option to sue if it is ordered to suspend European cloud operations amid concerns that these services could get caught up in a transatlantic trade war, Politico reported.

During an event in Brussels, Microsoft President Brad Smith addressed growing European concerns that using U.S. cloud services is a risk. Some have suggested that the Trump administration could order U.S. companies to pause operations for EU customers, as retaliation in the trade war or if the EU continues to enforce its tech regulation.

Such an event is “exceedingly unlikely” to happen, Smith said, but the company acknowledges it’s “a real concern of people across Europe.” 

The company will add a binding clause to its contracts with European governments and the European Commission stating that it would keep the option open to go to court in the event other governments ordered it to suspend or cease cloud operations, it said in a blog post. 

Microsoft reported: Forty-two years ago, Microsoft released the very first version of Microsoft Word. It was a major milestone in the company’s journey to enhance people’s productivity through innovation. It also marked the young and growing company’s first big step in Europe with the first Microsoft product localized in multiple European languages, starting with German and French. 

Since then, our economic reliance on Europe has always run deep. We recognize that our business is critically dependent on sustaining the trust of customers, countries, and governments across Europe. We respect European values, comply with European laws, and actively defend Europe’s cybersecurity. Our support for Europe has always been-and always will be-steadfast. 

In a time of geopolitical volatility, we are committed to providing digital stability. That is why today Microsoft is announcing five digital commitments to Europe. These start with an expansion of our cloud and AI infrastructure in Europe, aimed at enabling every country to fully use these technologies to strengthen their economic competitiveness. And they include a promise to uphold Europe’s digital resilience regardless of geopolitical and trade volatility.

CNBC reported: Microsoft President Brad Smith says the U.S. tech giant is committed to respecting European laws — even though it may not always agree with them.

“Like every citizen and company, we don’t always agree with every policy of every government. But even when we’ve lost cases in European courts, Microsoft has long respected and complied with European laws,” Smith said in a blog post Wednesday.

Smith’s comments are part of a charm offensive Microsoft is making with Europe this week, after tensions between the United States and European Union ratchet up in recent weeks over U.S. President Donald Trump’s tariffs. 

Trump’s trade ware with U.S. trading partners — including the European Union, China and others — has raised fears that the EU could use its regulatory crackdown on America’s technology giants as a tool to counter trade restrictions.