FTC Appeals Court Ruling on Microsoft’s Activision Blizzard Deal

The US Federal Trade Commission (FTC) has filed an appeal against the Californian court’s decision to authorize Microsoft to complete its $68 billion acquisition of Activision Blizzard (via IGN). The FTC previously hinted that it could appeal the court’s verdict earlier this week in a statement emphasizing “the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles.”

In her decision that denied the FTC’s request to block the deal, Judge Corley made it pretty clear that Microsoft’s various deals with Nintendo, Nvidia, and other cloud gaming platforms will result in Activision Blizzard games being available to more consumers. And as you may know, protecting the interest of American consumers is pretty much the FTC’s mission.

Brad Smith, Vice Chair and President of Microsoft quickly issued a statement on the FTC’s decision to appeal. “The District Court’s ruling makes crystal clear that this acquisition is good for both competition and consumers. We’re disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward,” Smith wrote.

As it turns out, Microsoft may indeed get ready to close the deal in the coming days. Nasdaq announced that Activision Blizzard will leave the Nasdaq Stock Market on July 17, just a day before Microsoft’s July 18 deadline to complete the acquisition and avoid paying a $3 billion breakup fee.

While it remains to be seen if the FTC’s appeal could block the acquisition ahead of that July 18 deadline, the situation in the UK remains more concerning. After blocking the deal earlier this year, the country’s Competition and Markets Authority (CMA) said yesterday that it won’t accept new remedies from Microsoft, though it could launch a new investigation if Microsoft chose to restructure its Activision Blizzard deal. That process could take months, though.

Microsoft may well be tempted to close its acquisition of Activision Blizzard without reaching an agreement with the CMA. However, the consequences of such a decision are quite unclear at this stage.