FTC Loses Yet Another Bid to Block Microsoft Acquisition of Activision Blizzard

The U.S. Federal Trade Commission’s losing streak continues, with a federal appeals court rejecting its legal challenge of Microsoft’s 2023 acquisition of Activision Blizzard. The 9th U.S. Circuit Court of Appeals unanimously upheld an earlier ruling against the FTC, noting that the agency was unlikely to win the case and is not entitled to a preliminary injunction halting the integration of the game maker into Microsoft.

“The FTC failed to sufficiently show that Microsoft would foreclose or partially foreclose rivals after the merger either by making the popular game Call of Duty exclusive to its Xbox console or by releasing only an inferior version of the game for Sony’s rival PlayStation,” the ruling explains. “As to the library subscription services market, the district court did not abuse its discretion by holding that the FTC had not made an adequate showing that the merger would substantially lessen competition. Finally, the district court did not abuse its discretion in similarly finding an insufficient likelihood of success on the FTC’s claim that the merger would substantially lessen competition in the cloud-streaming market, given that the FTC failed to show that Activision Blizzard content would be available to this market in the absence of the merger.”

Despite losing repeatedly in its bid to prevent this acquisition, the FTC took the unprecedented step of continuing with an internal administrative proceeding investigating the Microsoft acquisition of Activision Blizzard in late 2023. And the agency appealed the final ruling against it a month later, claiming that the district court had overstepped its bounds and overlooked key facts.

Well, now it’s lost that case too.

“The district court applied the correct legal standards and that it did not abuse its discretion, or rely on clearly erroneous findings, in holding that the FTC had failed to make a sufficient evidentiary showing to establish the requisite likelihood of success on the merits of its claim,” this week’s ruling concludes. “Given the FTC’s failure to make an adequate showing as to its likelihood of success on the merits as to any of its theories, the district court properly denied the FTC’s motion for a preliminary injunction on that basis … [But] even if the FTC had made a sufficient showing, the balance of equities did not favor a preliminary injunction.”

In short, the FTC continues to waste taxpayer dollars and doesn’t seem to understand the important role it can play in regulating Big Tech.