The US Federal Trade Commission appealed a court ruling that allowed Microsoft Corp.’s $69 billion takeover of Activision Blizzard Inc. to move forward.
(Bloomberg) — The US Federal Trade Commission appealed a court ruling that allowed Microsoft Corp.’s $69 billion takeover of Activision Blizzard Inc. to move forward.
The appeal marks the latest in the FTC’s effort to block the mega gaming deal after it lost a court ruling that allows Microsoft to cinch the merger.
The FTC asked the 9th Circuit Court of Appeals in San Francisco on Thursday to overturn a lower-court judge’s finding that the blockbuster game deal won’t thwart competition in the markets for console, subscription and cloud gaming and harm consumers.
US District Judge Jacqueline Scott Corley on Tuesday denied the agency’s request for a preliminary injunction that would have stopped the deal from closing before a July 18 deadline.
Despite the huge blow, the FTC isn’t backing down in the antitrust fight that represents a major test of its ability to block big tech deals in court after the agency lost a challenge to an acquisition by Meta Platforms Inc. earlier this year.
FTC Chair Lina Khan defended the agency’s decision to appeal the ruling earlier Thursday during a House Judiciary Committee hearing. Republicans criticized the FTC’s record of merger losses, asking if she was “losing on purpose” to influence Congress to pass antitrust legislation.
“We fight hard when we believe there is a law violation,” she said. “When we get an adverse ruling, our teams look closely at the text of opinion and see if there are errors on matters of law that warrant an appeal.”
Earlier: FTC’s Khan Branded ‘Bully’ in GOP Attack Over Deals, Ethics
Corley said the FTC would need an emergency stay from the 9th Circuit to extend a temporary hold on the deal that is set to expire at midnight Friday US West Coast time.
The appeal creates another legal hurdle for Microsoft is it pushes to close a deal that would help expand its presence in mobile gaming and vault itself to the No. 3 position in the global gaming market after Tencent Holdings Ltd. and Sony Corp.
The FTC is angling to move ahead with an administrative antitrust challenge to the deal that was scheduled to begin early next month. Microsoft also remains stuck in a battle with the UK’s Competition and Markets Authority that vetoed the deal in May.
Read more: Microsoft Cleared to Buy Activision in US as UK Pauses Fight
After Corley’s decision came down, the CMA said it’s willing to reassess proposals from Microsoft and agreed to pause the companies’ appeal before the Competition Appeal Tribunal. That hold gives the firms a chance to suggest potential fixes aimed at easing UK concerns that the takeover would stymie competition. But a restructuring of the deal could also trigger a new investigation by Britain’s antitrust watchdog.
(Updates with Khan comments at hearing from sixth paragraph.)
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