© Reuters. FILE PHOTO: The Microsoft logo is seen on a smartphone placed over the Activision Blizzard logo shown in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) – A US appeals court on Friday denied the Federal Trade Commission’s request to block Microsoft’s (NASDAQ:) $69 billion deal to buy “Call of Duty” company Activision Blizzard (NASDAQ:).
The decision removes one of the few remaining hurdles preventing Xbox maker Microsoft from finalizing the deal and expanding its gaming business.
The Federal Trade Commission also asked Judge Jacqueline Scott Corley of the US District Court in Northern California for a similar stay but denied that request late Thursday.
The FTC did not immediately respond to a request for comment.
“We appreciate the quick response of the Ninth Circuit that rejected the FTC’s motion to further delay the transaction,” said Microsoft President Brad Smith. “This brings us another step closer to the finish line in this marathon of global regulatory reviews.”
The deal, the largest in the history of the video game industry, still needs to be approved in Britain.
Now that its latest appeal has been denied, the FTC may drop the fight, as it has in similar situations in the past. This happened as recently as February with Meta Platforms’ purchase of VR content maker Unlimited. The FTC lost in federal court and dropped the appeal.
The merger agreement between Microsoft and Activision will expire on July 18th. After July 18th, either company will be free to walk away from the deal unless they negotiate an extension.
In Britain, the Competition and Markets Authority opposes the deal over concerns about its impact on competition in cloud gaming. On Friday, he received a “detailed and complex” new motion from Microsoft, extending the deadline for a final ruling to Aug. 29, though he said he aimed to rule as soon as possible.
In the US, the FTC has argued that the deal would harm consumers whether they play video games on consoles or have subscriptions because Microsoft would have an incentive to drive away competitors like Microsoft. Sony (NYSE: Group). Microsoft responded by offering competitors 10-year licenses.
But Judge Corley ruled on Tuesday that the deal was legal under antitrust law and denied the FTC’s request for a preliminary injunction on it to give the FTC time to bring it before an internal FTC judge in August.
The agency appealed the loss to the Ninth Circuit Court of Appeals, which issued its ruling on Friday.
“This case is about more than one video game and the console hardware to play it. It is about the future of the gaming industry. At stake is how future gamers will play and whether the emerging subscription and cloud markets will turn into central, walled gardens,” the FTC wrote in a court filing. appeal.
Microsoft struck a deal to give rival Nintendo access to Activision’s Call of Duty, contingent on the deal closing. The company argues that agreements like this show that it does not plan to store games for use on the Xbox platform and subscription service.