A federal appeals court dismissed a legal challenge from the Federal Trade Commission regarding Microsoft’s $69 billion acquisition of Activision Blizzard, the developer of the popular Call of Duty franchise.
The decision, made by the 9th US Circuit Court of Appeals in San Francisco, upheld a previous ruling by a lower court that denied the FTC’s request for a preliminary injunction to halt the merger, which was completed in 2023.
The three-judge panel unanimously agreed that the lower court had applied the appropriate legal standards and determined that the FTC failed to demonstrate a likelihood of success in its argument that the merger would diminish competition in the market.
A representative from the FTC chose not to provide a comment. Microsoft also did not respond to requests for a statement on the ruling.
This ruling was part of an antitrust lawsuit initiated by the FTC in 2022 against Microsoft, the maker of Xbox consoles.
While pursuing this lawsuit, the FTC also challenged the merger through an internal administrative process, which was paused in 2023 under President Biden’s administration, awaiting the outcome of the 9th Circuit’s deliberations.
The acquisition of Activision Blizzard represents the largest transaction in the gaming sector to date. It received approval from competition regulators in the UK and underwent scrutiny in various international jurisdictions before its closure in late 2023.
The FTC had sought to temporarily prevent the transaction while it continued its administrative challenge. The agency argued that the merger would enable Microsoft to maintain a competitive edge over rivals in the console and cloud gaming markets.
In a ruling in July 2023, US District Judge Jacqueline Scott Corley denied the FTC’s bid to block the merger, concluding that the agency had not shown that Microsoft’s acquisition of Activision would “substantially lessen competition in the video game library subscription and cloud gaming markets.”
In its appeal, the FTC contended that the lower court had imposed an excessively high standard in its evaluation of the preliminary injunction request.
© Thomson Reuters 2025
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