FTC Revives its Battle Against Microsoft’s Acquisition of Activision Blizzard (UPDATED)

UPDATED: This article was updated with Microsoft’s response. –Paul

It can’t prevent Microsoft from acquiring Activision Blizzard, but the U.S. Federal Trade Commission (FTC) will nonetheless hold an internal trial on the topic. Because, seriously. WTF.

“The Commission has determined that the public interest warrants that this matter be resolved fully and expeditiously,” a new FTC order explains. “Therefore, the Commission is returning this matter to adjudication.”

An adjudication is when the FTC files a complaint using an internal administrative process rather than externally in a federal court where, I will remind you, the FTC has already lost twice this year, first in the wake of the June hearings and then again a few days later when the FTC appealed that first verdict.

And it wasn’t even close: The federal judge that oversaw the hearings noted that “there are no internal documents, emails, or chats contradicting Microsoft’s stated intent not to make Call of Duty exclusive to Xbox consoles. Despite the completion of extensive discovery in the FTC administrative proceeding, including the production of nearly 1 million documents and 30 depositions, the FTC has not identified a single document which contradicts Microsoft’s publicly stated commitment to make Call of Duty available on PlayStation (and Nintendo Switch).”

Back in July, in the wake of those two defeats, the FTC halted its internal trial against Microsoft, which indicated that it was open to a settlement similar to the one that the UK Competition and Markets Authority (CMA) appears to have accepted. This was as expected, as the FTC almost always drops internal administrative cases when it loses in federal court. But now it’s back on. Why?

Based on the brief statement noted above, the FTC apparently believes that it is in the public interest to try this case internally. In other words, it must believe that this acquisition could somehow result in harm to consumers or competitors, in sharp contrast to all of the public feedback it and regulators worldwide have received over the past 18 months.

As noted, the FTC cannot stop Microsoft from acquiring Activision Blizzard. But if it wins its own internal trial—tantamount to giving yourself a “World’s Best Dad” mug, apparently, it could then seek to unwind the deal by divesting Activision Blizzard from the software giant. That would be a risky bet, and an unlikely outcome, however.

“We’re focused on working with Microsoft toward closing,” an Activision spokesperson said. “How the FTC uses limited taxpayer dollars is its decision.”

“We still anticipate that we will close the transaction by October 18, and we have full confidence in our case and the deal’s benefits to gamers and competition,” a Microsoft spokesperson told me.