Microsoft’s acquisition of video game maker Activision Blizzard faced a setback as the Federal Trade Commission’s (FTC) request to temporarily halt the deal was denied by a federal appeals court. The court’s decision upholds a ruling by a district court judge, allowing the transaction to proceed while the FTC’s antitrust challenge plays out. However, the deal still requires approval from UK regulators, the Competition and Markets Authority (CMA), who have paused their legal proceedings to engage in renewed negotiations with Microsoft.

Brad Smith, Microsoft’s president and vice-chair, expressed his gratitude for the court’s decision on Twitter, stating that it brings them closer to the finish line in the global regulatory reviews. Legal experts see the ruling as a win for Microsoft, even though the FTC’s lawsuit alleging anti-competitive behavior remains unresolved. The ongoing costs for Microsoft to keep the deal on hold until the FTC’s case is resolved would eventually reach a tipping point, as the agency faces no deadline to conclude its investigation.

The FTC initially filed a challenge to block the merger in December, arguing that combining the two companies would suppress competition in the gaming console, subscription content, and cloud-gaming markets. If the acquisition goes through, it would be the largest in Microsoft’s history and the gaming industry’s largest. Microsoft currently controls 16% of the console market and aims to gain an edge by adding Activision Blizzard’s highly profitable “Call of Duty” franchise to its existing first-party titles, such as “Halo” and “Forza.” This move would position Microsoft as the second-largest home console maker by revenue, behind Sony.

The deal has received approval from global regulators in the EU, Brazil, China, Japan, and South Korea. However, the UK’s CMA has expressed concerns that the acquisition could lead to reduced innovation and less choice for UK gamers in the future. To address these concerns, Microsoft has made agreements with Nintendo and Nvidia, ensuring that “Call of Duty” will remain available on competing platforms for at least a decade.

The FTC has not yet commented on the appellate court’s decision. As the situation unfolds, investors and industry stakeholders will closely monitor any further developments in this high-stakes deal.

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Microsoft’s Acquisition of Activision Blizzard Clears Hurdle as Court Denies FTC’s Request

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The Federal Trade Commission’s (FTC) attempt to halt Microsoft’s acquisition of Activision Blizzard has been denied by a federal appeals court, bringing the $69 billion deal one step closer to completion. Despite the ongoing antitrust challenge by the FTC, the court’s decision allows the transaction to proceed, subject to approval from UK regulators. Microsoft’s acquisition of the video game maker would be the largest in the company’s history and the gaming industry’s history, solidifying its position in the highly competitive market.

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Microsoft has received a significant boost in its bid to acquire video game maker Activision Blizzard, as a federal appeals court denied the Federal Trade Commission’s (FTC) request to halt the deal temporarily. The decision upholds a ruling by a district court judge, allowing the acquisition to proceed while the FTC’s antitrust challenge unfolds. However, the deal still requires approval from UK regulators, who have paused their legal proceedings to engage in further negotiations with Microsoft.

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Microsoft sees the court’s decision as a positive development, as it brings them closer to the finish line in the global regulatory reviews. Legal experts view the ruling as a win for Microsoft, despite the unresolved FTC lawsuit alleging anti-competitive behavior. The ongoing costs for Microsoft to keep the deal on hold until the FTC’s case is resolved would eventually become burdensome, as the agency faces no deadline to conclude its investigation.

The FTC initiated the challenge to block the merger based on concerns that combining the two companies would stifle competition in the gaming console, subscription content, and cloud-gaming markets. If the acquisition is successful, it would mark the largest deal in Microsoft’s history and the gaming industry’s history. Currently, Microsoft holds a 16% market share in the console market, and the addition of Activision Blizzard’s highly lucrative “Call of Duty” franchise to its existing first-party titles, such as “Halo” and “Forza,” would position Microsoft as the second-largest home console maker by revenue, trailing behind Sony.

The deal has already secured approval from global regulators in the EU, Brazil, China, Japan, and South Korea. However, the UK’s Competition and Markets Authority (CMA) expressed concerns that the acquisition could lead to reduced innovation and less choice for UK gamers in the future. In response, Microsoft has made agreements with Nintendo and Nvidia, assuring that “Call of Duty” will remain available on competing platforms for at least ten years.

The FTC has not yet commented on the appellate court’s decision. As the situation unfolds, investors and industry stakeholders will closely monitor any further developments in this high-stakes deal.