Microsoft’s FTC appeals loss in Activision Blizzard case

Says the Federal Trade Commission (FTC) he is attractive A recent US federal court order paved the way for Microsoft to buy Activision Blizzard. The FTC has provided notice that it is appealing Judge Jacqueline Scott Corley’s decision, but we won’t know the regulator’s arguments until the full appeal is filed with the Ninth Circuit Court of Appeals.

Microsoft won an uphill battle with the FTC earlier this week as a federal judge denied a preliminary injunction request from the US regulator. “The court found that the FTC did not show the possibility that it would prevail on its claim that this particular vertical combination in this specific industry might significantly reduce competition,” Judge Corley wrote in the ruling. On the contrary, Standard Evidence indicates increased consumer access to Call of duty and other Activision content”.

If the preliminary injunction is issued, Microsoft will be temporarily banned from closing the Activision Blizzard deal until the outcome of the FTC’s administrative case against the company. That separate legal challenge is still scheduled to begin on Aug. 2.

Now that the FTC has decided to appeal Judge Corley’s decision, the regulator needs the Ninth Circuit Court of Appeals to issue an emergency stay to extend the current Temporary Restraining Order (TRO) that is set to expire at 11:59 p.m. PST on Friday, July. fourteenth. It’s not clear if the appeals court will issue a ruling before the July 18 deal deadline, which could leave the door open for Microsoft to close the Activision Blizzard deal on Monday or Tuesday without a restraining order.

Brad Smith, vice president and president of Microsoft, said in a statement to the edge. “We are disappointed that the FTC continues to pursue what has become a clearly weak case, and we will oppose further efforts to delay the ability to move forward.”

“The facts haven’t changed.” tweeted Lulu Cheng Meserve, CEO of Activision Blizzard and Executive Vice President of Corporate Affairs. “We are confident that the United States will remain among the 39 countries in which integration can take place. We look forward to advancing the strength of our case in court — again.”

Mike Ybarra, president of Blizzard Entertainment, mocked the appeal on Twitter. “Your tax money at work,” said Ybara.

Microsoft still needs to resolve the UK’s Competition and Markets Authority (CMA) issues with its acquisition before it can close, after the regulator blocked the deal over cloud concerns earlier this year. Microsoft and the CMA announced almost immediately that they had agreed to stop their legal battles to negotiate after Judge Corley’s ruling on Tuesday.

In a surprise statement on Wednesday, the CMA then warned that the opportunity for Microsoft to restructure its deal could “lead to the realization of a new merger,” and that talks between the regulator and Microsoft were still at an “early stage.”

report from CNBC It originally claimed that Microsoft and the CMA had agreed to a “small abstract” to address cloud gaming concerns, but was later corrected to state that Microsoft had only offered a “small, separate abstraction” that the CMA did not necessarily accept. CNBC He didn’t expand on what such a divestiture would entail, but such a scenario would likely be UK-specific and could involve changes to Microsoft’s Xbox Cloud gaming services in the region.

EU regulators also had cloud gaming concerns, but approved the deal earlier this year thanks to 10-year licensing deals Microsoft offered to cloud gaming competitors. The CMA also warns that Microsoft “does not have the opportunity to roll out new treatments” once the final report is released.

Microsoft’s deal with the European Union included a key remedy that includes a free license to consumers in EU countries that would allow them to stream via “any cloud game streaming services of their choice” all Activision Blizzard games for PC and consoles that they have a license to. Cloud service providers will also be given a free license to stream these games.

All eyes now turn to the Ninth Circuit Court of Appeal and Microsoft’s potential deal with the UK’s Capital Markets Authority.

Update July 12th, 8:26PM ETAdded statement from Microsoft.

Correction July 12th, 7:33 PM ET: Based on a CNBC report, this article originally said that Microsoft and CMA had agreed on a “small divestment”. CNBC has corrected its article, and now says Microsoft offered the divestiture without saying the change was accepted.