Activision Blizzard Acquisition: Appeal Denied, FTC Persuades, CMA Continues to Delay

The argument in the USA about the takeover of Activision Blizzard by Microsoft just doesn’t end. Despite the court ruling, the FTC is now trying by all means to block the deal.

One thing has to be said about the Federal Trade Commission under its boss Lina Khan – she is stubborn. After the ruling, which overturned the injunction against Microsoft’s acquisition of Activision Blizzard, the request for an appeal followed like a shot. How Reuters reported today, the FTC’s appeal to stop the takeover has since been denied. Judge Jacqueline Scott Corley, the same judge who originally ruled against the FTC in its attempt to stop the acquisition of Activision Blizzard, dismissed the FTC’s new objection.

With Activision already delisted from the NASDAQ index in preparation for an imminent acquisition, the FTC is now attempting another application. The FTC filed for another injunction yesterday. In it, the FTC is asking the court to stop Microsoft from completing the Activision deal until the FTC can complete its review of the merger, which is separate and ongoing from this case. Alternatively, she is seeking an injunction pending a court hearing of her pending appeal.

The FTC’s argument this time is that the wrong legal standard was used in its original request for an injunction. The lawsuit also alleges that the court erred in law in several judgments, misjudging various aspects surrounding Game Pass, exclusivities, and the deals Microsoft made with other providers.

Meanwhile, criticism of the actions of the FTC and its Chair, Lina Khan, is growing. President Biden’s Khan came under fire from congressional Republicans during an oversight hearing.

Among other things, Khan was accused: “Not only did the court reject your allegation of probable anticompetitive effect, it found exactly the opposite. The evidence points to greater consumer access. So why should Americans have confidence in your judgment when it Biden-appointed judge says you’re so far off the mark?” Meanwhile, MP Darrell Issa called Kahn a bully for trying to prevent Microsoft from gaining an advantage over Japanese competitor Sony.

In view of the scenes from the hearing, the gaming community does not shy away from criticism either. Khan has been accused of taking the Activision deal too personally or wanting to gain fame at all costs. She is also accused of wasting taxpayers’ money on an absurd campaign.

Khan is not undisputed. The legal scholar is considered a hardliner when it comes to Big Tech companies and has massively criticized corporations such as Amazon and Google in the past. After her appointment as chair of the FTC in 2021, both Amazon and Facebook filed petitions to remove her from investigations into these companies, saying she could not be impartial due to her previous criticism of the companies.

In any case, it is certain that the events in the USA are taking on absurd traits. While Microsoft announced that it would now also bring the CMA in Great Britain back to the negotiating table after the positive verdict, Turkey was another country that agreed to the deal. So far, the CMA and FTC are the only institutions worldwide to reject the deal.

Update:

In the meantime, the British CMA has also come up with a new date. The British authorities were supposed to comment again by July 18, but have now announced a further delay. “The CMA believes that the remaining time within the statutory time limit is insufficient to fully and adequately consider Microsoft’s comments on the proposed order,” the regulator said. “Therefore, the investigative group believes that there are special reasons for a six-week extension.”

The new deadline for the CMA’s final decision is now set for August 29, although the regulator says it “seeks to fulfill its duty as soon as possible and before that date”. It remains to be seen how Microsoft will react to this. The takeover agreement expires in a few days. In other words, Microsoft must either extend it together with Activision Blizzard, pay a contractual penalty of three billion US dollars, or somehow go through with the deal excluding Great Britain, for example by not offering Activision Blizzard titles in Game Pass until further notice.