US court denies FTC bid to halt Activision acquisition

Microsoft’s proposed $69 billion acquisition of Activision Blizzard moved closer on July 11 after a US federal judge rejected the Federal Trade Commission’s bid to halt it while the agency pursues its antitrust challenge.

Illustrative file photo: a Microsoft office facade in 2015, not the court ruling. Photo: efes, 2015. Original photograph via Wikimedia Commons. CC0 1.0. Recompressed; responsive crops.

Judge Jacqueline Scott Corley’s opinion, signed and filed July 10, denies a preliminary injunction after five days of evidence. The federal case is dismissed, but that disposition concerns the request for interim relief. The separate FTC administrative proceeding remains scheduled to begin on August 2.

FTC spokesperson Douglas Farrar said the agency was disappointed and would announce its next step in the coming days. It continued to argue that the deal threatens competition in consoles, subscription services and cloud gaming.

Separate proceedings and deadlines

Under the standard Corley applied, the court assesses the FTC’s likelihood of success and balances the equities. It isn’t deciding the final administrative case. Corley expressly measured likely success before the administrative law judge, rather than after an eventual appeal.

The parallel proceedings were already explicit in Microsoft and Activision’s June 26 scheduling motion. The companies sought changes to deadlines for handling evidence in the administrative case while litigating in federal court. They said their request wouldn’t move the August 2 hearing.

The opinion also preserves a temporary restraint until 11:59 p.m. on July 14, unless the FTC obtains an appellate stay. Separately, July 18 is the agreement’s termination date: either company may terminate if the transaction hasn’t closed, with Microsoft potentially owing a $3 billion fee. The contract’s timetable doesn’t supply regulatory approval.

Britain’s competition process remains another constraint. The CMA told The Register it was ready to consider proposals to restructure the transaction and address its concerns. It also said the companies and regulator had jointly asked the Competition Appeal Tribunal to pause litigation so they could work on those proposals. That request doesn’t establish that a revised deal has been accepted.

Activision chief executive Bobby Kotick welcomed the ruling in a July 11 employee message and said the company was ready to work with UK regulators on their remaining concerns.

Earlier coverage: CMA blocks Activision deal over cloud competition.