FTC Standoff: The Battle to Block Microsoft's Mega deal with Activision Blizzard Intensifies
FTC remains determined to halt Microsoft's acquisition of Activision Blizzard, undeterred by a prior court defeat Their efforts persist, albeit potentially limited to post-deal intervention
Highlights
The Federal Trade Commission plans to continue its in-house trial to block Microsoft's acquisition of Activision Blizzard despite a previous ruling in favor of the deal.
The 9th Circuit U.S. Court of Appeals is still pending in reaching a verdict on the case, and it may be several months before a decision is made.
The acquisition deadline between Microsoft and Activision Blizzard has been extended until October 18, with no influence from the FTC's opposition. Microsoft is also currently appealing against the British CMA's decision.
The Federal Trade Commission has decided to proceed with its internal trial to stop Microsoft from acquiring Activision Blizzard. However, as a federal court in San Francisco ruled in favor of Microsoft's acquisition in July, the FTC currently does not have the authority to prevent the deal from happening, at least for now.
Despite the FTC swiftly appealing the verdict in the Microsoft trial, the 9th Circuit U.S. Court of Appeals has not yet reached a decision on the matter. There is no specific time limit for the court to deliberate on the issue, although its official website mentions that most cases are resolved within three months to a year. Based on the shorter end of that timeframe, it is likely that the decision will not be announced before mid-October.
Regardless of the verdict, the FTC is moving forward with its in-house hearing as stated in a September 26 order on continued adjudication. The timing of the trial is dependent on the 9th Circuit's ruling, with proceedings scheduled to commence 21 days after the second-instance verdict is issued. The appellate court previously denied an emergency stay that would have prolonged the FTC's temporary restraining order against the deal, which expired on July 14. Microsoft and Activision Blizzard recently agreed to extend the acquisition deadline until October 18.
However, the extension was not a result of the FTC's pushback. It was granted days after the regulator's defeat in federal court, leaving them with no immediate options to prevent the deal. Instead, the new deadline was set to accommodate Microsoft's appeal against the British CMA's decision to block the transaction. Despite the ongoing appeal process, Microsoft's acquisition of Activision Blizzard received preliminary approval from the CMA in late September.
Assuming the CMA's decision remains unchanged in the coming weeks, the blockbuster buyout of Activision Blizzard is expected to be completed before the second deadline expires. Microsoft has a $4.5 billion breakup fee at stake if the deal were to fall through at this stage. To put it into perspective, this amount surpasses Activision Blizzard's record-breaking year in 2021 when the company recorded a profit of $3.16 billion.
The FTC's current effort to block the transaction appears to be facing significant challenges. Even if the internal trial concludes with a verdict against the $68.7 billion deal, it would still need to withstand examination by an official court for the FTC to have the authority to dissolve the merged entity.
