2023-07-12 23:23:37
The U.S. Federal Trade Commission (FTC) said Wednesday it is appealing a federal judge’s ruling allowing Microsoft to pursue a $69 billion takeover of “Call of Duty” maker Activision Blizzard. of dollars.
Microsoft’s victory in court on Tuesday, and the UK competition authority’s subsequent pushback, brought the tech giant one step closer to finalizing its deal with Activision, Microsoft’s biggest ever deal.
Still, any outstanding regulatory hurdles make it more likely that Microsoft’s deal with Activision will expire on July 18, without the deal having been completed. After July 18, either company will be free to opt out of the deal, unless they negotiate an extension.
The FTC filing for the call does not provide details. The case will go to the Ninth Circuit Court of Appeals on the West Coast.
Microsoft said it would oppose the appeal.
We are disappointed that the FTC is pursuing what has become a demonstrably weak case, and we will oppose any further attempts to delay the possibility of moving forward,” Microsoft President Brad Smith said in a statement. sent by email.
The FTC declined to comment further on the notice of appeal.
While the companies succeeded on Tuesday in rejecting a court injunction preventing them from closing their deal, the judge left in place a stay preventing them from doing so until Friday, in order to give the FTC time to appeal.
The FTC can ask the appeals court to stay the agreement.
In her opinion, San Francisco District Judge Jacqueline Scott Corley dismissed the Biden administration’s argument that the deal would harm consumers by giving Xbox game console maker Microsoft exclusive access to games such as the best-selling “Call of Duty”.
Britain’s Competition and Markets Authority (CMA), which had opposed the deal, said on Wednesday that a restructured deal between Microsoft and Activision Blizzard might address its concerns, subject to further investigation.
CAN WE SAY “CAN” OR “WILL”?
U.S. legal scholars disagree on whether the FTC had good reason to appeal, with some arguing that appellate courts tend to defer to judges on questions of fact, while d Others believe that Judge Corley may have erred in stating the criteria for stopping a transaction.
In her 53-page order, Ms. Corley said it was not enough for the FTC to assert that “a merger might lessen competition — the FTC must demonstrate that the merger is likely to lessen competition substantially.”
Lawyers have questioned that standard, saying that US antitrust law requires the FTC to prove that the proposed transaction “may” harm competition, not that it “will”.
To address the FTC’s concerns, Microsoft agreed to grant “Call of Duty” licenses to rivals, including a ten-year contract with Japanese company Nintendo Co, conditional on the merger’s completion.
When US antitrust agencies lose merger challenges in court, they rarely appeal.
That said, the FTC appealed a decision made more than a decade ago when it lost its fight once morest 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; writing by Diane Craft, Lincoln Feast and Muralikumar Anantharaman)
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