• The FTC is readying to appeal a decision that saw it fail in filing an injunction against Microsoft regarding its desire to purchase Activision Blizzard.
• The full appeal will be submitted to the Ninth Circuit Court of Appeals, but the argument from the FTC is yet to be determined.
• In its recent hearings involving Microsoft, the FTC failed to show that the Activision Blizzard deal would hamper competition within the gaming industry.

Earlier this week the Federal Trade Commission (FTC) lost in its move to place an injunction on Microsoft in its bid to purchase Activision Blizzard. At the time, the FTC said it would share its plans in the coming days, and now we know that it wants to appeal the loss, which is not wholly unexpected.

The FTC outlined that it will appeal the loss following the decision reached by Judge Jacqueline Scott Corley, although it is unclear at this stage how the regulator will argue its case moving forward. Those elements will likely be revealed once the full appeal is submitted to the Ninth Circuit Court of Appeals.

“Notice is hereby given that Plaintiff Federal Trade Commission (‘FTC’) appeals to the United States Court of Appeals for the Ninth Circuit from this Court’s Opinion dated July 10, 2023 and entered on the Court’s docket on July 11, 2023 at ECF Docket Number 305 denying the FTC’s request for a preliminary injunction pursuant to Federal Trade Commission Act § 13(b), 15 U.S.C. 53(b),” the FTC’s appeal notice laid out.

During the hearings, the FTC failed to adequately show that the Activision Blizzard acquisition threatens competitiveness within the gaming industry if it comes to fruition, so it will be interesting to see what tactic the FTC legal team takes for the appeal.

In her judgement, Corley explained that, “The Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.”

While it remains to be seen what route the FTC takes in its appeal, it looks like Activision Blizzard’s team is ready to head to court again, as Lulu Cheng Meservey, the company’s CCO and EVP of corporate affairs, tweeted out that, “The facts haven’t changed. We’re confident the U.S. will remain among the 39 countries where the merger can close.”

Another aspect that may need to be considered in all this is the outcome of negotiations between UK’s Competition and Markets Authority (CMA) with Microsoft. The two are currently in the early phase of discussions around reworking some of the elements of the Activision Blizzard, with cloud gaming seemingly an important part.

Should the CMA and Microsoft reach an agreeable outcome, the FTC will not have much support from other regulators across the globe.

[Image – Photo by Billy Freeman on Unsplash]