US Court Rejects FTC’s Request to Halt Microsoft’s Activision Settlement

WASHINGTON, July 13 (Reuters) – A US federal court on Thursday rejected the Federal Trade Commission’s request to order Microsoft (MSFT.O) will temporarily delay the closing of its $69 billion purchase of “Call of Duty” maker Activision Blizzard (ATVI.O)He showed a court file.

A federal judge had failed for Microsoft on Tuesday, saying the agency had not shown that the deal would be illegal under antitrust law. He The FTC appealed that loss. on Wednesday night, and Microsoft said it would fight that appeal.

Earlier Thursday, the FTC sought an injunction preventing the deal from closing until the US Court of Appeals for the Ninth Circuit ruled on a separate stay request filed with that court.

Any pending regulatory hurdles make it more likely that the deal between Microsoft and Activision will expire on July 18 without being completed. After July 18, either company will be able to pull out unless they negotiate an extension.

The FTC had asked that the court rule on the pause as soon as possible, noting that an existing temporary restraining order on the deal was due to end just before midnight Friday.

“We are disappointed that the FTC is continuing with what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward,” Microsoft Chairman Brad Smith said earlier in a mailed statement. electronic.

In its motion for stay to Judge Jacqueline Scott Corley, the FTC argued that her denial of a preliminary injunction to stop the settlement “raises serious and substantial issues for the Court of Appeals to decide.”

“The FTC asks this Court to bar the merger at issue pending resolution of the FTC’s appeal to the Ninth Circuit Court of Appeals. The motion is denied,” the judge said in the order Thursday night.

The FTC had said it was seeking a preliminary injunction to temporarily halt the deal until an internal FTC judge could evaluate it. But Corley applied the standard necessary to permanently stop the deal, which the agency argued was inappropriate.

The FTC also said the judge erred in assessing the deal’s effect on multiple game subscriptions and how much credit it gave Microsoft for reaching deals with rivals to salvage the proposed transaction.

To address the agency’s concerns, Microsoft has agreed to license “Call of Duty” to rivals, including a 10-year deal with Nintendo. (7974.T)subject to the closing of the merger.

The deal, the biggest in the history of the video game industry, also ran into trouble in Britain until this week. After the ruling in California, Britain’s Competition and Markets Authority, which had opposed the transaction, said a restructured deal between Microsoft and Activision Blizzard could meet its concerns, subject to a new investigation.

It is rare for a merger fight to go to an appeals court. That said, the FTC appealed a ruling more than 10 years ago when it lost its fight against Whole Foods’ purchase of Wild Oats. The agency reached an agreement with the companies before the appeals court made a decision.

Reporting by Diane Bartz and David Shepardson; Additional reporting by Kanishka Singh; Edited by Tim Ahmann, Josie Kao, and Jamie Freed

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