A federal appeals court on Wednesday dismissed the Federal Trade Commission’s legal challenge to Microsoft’s $69 billion (roughly Rs. 5,85,688 crore) acquisition of “Call of Duty” maker Activision Blizzard.
The San Francisco-based 9th U.S. Circuit Court of Appeals upheld a lower judge’s order saying the FTC did not have the authority to obtain a preliminary injunction to block the deal, which is due to close in 2023.
The three-judge panel unanimously ruled that the lower judge applied the correct legal standard and said the FTC had not shown that its claim that the merger would restrict competition was likely to succeed.
A spokesman for the Federal Trade Commission declined to comment. Microsoft did not immediately respond to a request for comment.
The decision comes amid an antitrust lawsuit filed by the Federal Trade Commission against Xbox maker Microsoft in 2022.
The Federal Trade Commission, which enforces antitrust laws, separately challenged the merger in an internal administrative proceeding. The proceedings were put on hold in 2023 during President Joe Biden’s administration, pending a decision by the Ninth Circuit.
The Activision Blizzard deal marks the largest acquisition ever in the video game market. The deal is expected to close in late 2023, subject to approval by the UK competition regulator. The acquisition also faces regulatory scrutiny in other international markets.
The FTC lawsuit seeks an order freezing the Activision Blizzard deal while the agency pursues an administrative challenge.
The agency claims that Microsoft’s partnership with Activision will enable the combined company to fend off competitors in the Xbox console and its subscription and cloud gaming businesses.
U.S. District Judge Jacqueline Scott Corley declined to block the acquisition in July 2023, finding that the FTC had not shown that Microsoft’s ownership of Activision Blizzard would “substantially lessen competition in the video game library subscription and cloud gaming markets.”
The FTC argued on appeal that the court applied an overly strict standard when weighing whether to grant a preliminary injunction.
© Thomson Reuters 2025
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