A US appeals court has dealt a blow to the Federal Trade Commission (FTC) by denying its bid to halt Microsoft Corp.'s acquisition of Activision Blizzard Inc. The ruling from the 9th Circuit US Court of Appeals paves the way for the two companies to proceed with the largest gaming deal in US history. The only remaining hurdle is approval from UK regulators, who are set to discuss the deal at a hearing scheduled for July 17.
Microsoft's President, Brad Smith, expressed his satisfaction with the court's decision, stating that it brings them closer to the finish line in the global regulatory reviews. Activision Blizzard, however, has yet to comment on the ruling.
The FTC, led by Chair Lina Khan, had sought to block the merger due to concerns that Microsoft might restrict access to Activision's popular games on competing consoles or services. The court had previously ordered a pause on the merger, but the deadline expired at midnight Pacific time on Friday.
For Microsoft, closing the deal before the July 18 deadline is crucial to avoid paying a $3 billion breakup fee to Activision. Therefore, the company has a strong incentive to move forward swiftly.
The FTC has not commented on the ruling and whether it will continue to pursue its case against the deal. Proceedings before an FTC administrative judge were scheduled to commence on August 2.
In addition to the US regulatory hurdles, Microsoft also faced opposition from the UK Competition and Markets Authority (CMA), which vetoed the merger in April. The CMA expressed concerns about the deal's impact on the cloud gaming market. However, Microsoft has been granted a rare opportunity to offer a remedy by the CMA, and it has already proposed selling the cloud-based market rights for games in the UK as a solution.
While the court ruling is a significant setback for the FTC, the final decision still rests with the UK regulators. The extended deadline for issuing a legally final order on the deal is now August 29, providing additional time for discussions and potential remedies to be considered.