The Federal Trade Commission (FTC) is once again attempting to block Microsoft’s $69 billion purchase of Activision Blizzard — the maker of the “Call of Duty” video game franchise — and arguing that a federal judge wrongly allowed it to proceed.
Microsoft moved to acquire Activision in January 2022 in what is billed as the largest acquisition in the history of gaming. The tech giant prevailed over the FTC’s effort to block the acquisition in the federal Northern District of California in July, and after the deal received the blessing of British regulators in September, the deal was closed in October.
The FTC is appealing the federal district court’s ruling that permitted the deal to proceed, arguing that the lower-court judge held the antitrust regulator to too high a standard.
The agency is expected to argue before a three-judge panel of the Ninth Circuit Court of Appeals that the lower court erred by effectively requiring it to prove that the deal was anti-competitive when the appropriate standard is simply that the deal raises serious competitive concerns.
It’s also expected to argue that the district court judge wrongly relied on deals that Microsoft reached with rivals in the video game space to ensure distribution of games across various platforms as evidence that the merger wouldn’t undermine competition.
Microsoft, which owns the Xbox brand of gaming consoles, announced in July that it reached a deal with Sony, owner of the rival PlayStation console, to ensure that “Call of Duty” and other popular games would still be available on other platforms following the merger’s completion.
The tech giant is expected to argue before the three-judge appellate panel that the FTC failed to show that the district court judge was mistaken in her ruling that the acquisition wasn’t anti-competitive or demonstrate that Microsoft would withhold the “Call of Duty” franchise from other gaming platforms.
The FTC during the Biden administration has sought to block several mergers and acquisitions over concerns that they could reduce competition and, in turn, raise prices and reduce choices for consumers — though it has largely been unsuccessful in making its case in court.
Its effort to block the Microsoft acquisition of Activision is arguably the most prominent of those antitrust challenges, and the agency’s efforts have prompted criticisms that it’s overstepping its authority.
After the three-judge appellate panel renders its decision, it’s possible that the case could undergo a further appeal before the full Ninth Circuit Court of Appeals.
The three judges scheduled to hear the FTC’s appeal include Daniel Collins and Danielle Forrest, who were nominated by former President Donald Trump, and Jennifer Sung, who was nominated by President Joe Biden.
Reuters contributed to this report.