A U.S. appeals court has dismissed federal regulators’ attempt to block Microsoft’s $68.7 billion acquisition of Activision Blizzard, allowing the tech giant to proceed with the biggest deal in tech history. The court concluded that there were no grounds to prevent Microsoft from finalizing its nearly two-year-old deal. If the deal is not completed by Tuesday, Microsoft faces a $3 billion termination fee.
“This brings us another step closer to the finish line in this marathon of global regulatory reviews,” said Microsoft President Brad Smith in a statement.
The Federal Trade Commission (FTC) filed an appeal in a last-ditch effort to halt the merger after a federal judge ruled against the agency’s attempt to block it. The FTC sought an injunction to prevent Microsoft from closing the deal as early as this weekend.
The FTC declined to comment on the ruling.
The deal between Microsoft and Activision Blizzard was announced in January 2022. The FTC sued to block the sale in December, claiming it would lead to competition suppression in the gaming industry. U.S. District Judge Jacqueline Scott Corley’s ruling stated that the FTC failed to prove substantial harm and highlighted Microsoft’s promises to maintain competition in the gaming market.
In its appeal, the FTC argued that Corley made “fundamental errors” and emphasized the importance of an open and competitive gaming landscape.
Corley also denied the FTC’s request to halt the purchase while awaiting the Ninth Circuit’s decision. The case has been a significant test for the FTC’s scrutiny of the tech industry under its chairperson, Lina Khan.
The deal still needs approval from British antitrust regulators, who have extended their deadline to evaluate Microsoft’s submission and reconsider their initial rejection based on concerns about competition in the cloud gaming market.
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