A federal judge ruled in favor of Microsoft yesterday, finding that the U.S. Federal Trade Commission’s lawsuit to block the company from purchasing Activision Blizzard didn’t adequately prove the deal would harm competition in the gaming market. But the FTC could still have its way by filing an appeal.
The FTC is “leaning toward” appealing the ruling, according to a report from Bloomberg, and that appeal could come as soon as today, July 12.
U.S. District Judge Jacqueline Scott Corley “extended a temporary restraining order” that prevents Microsoft from closing the deal until midnight Pacific Time on Friday, July 14. But yesterday, she ruled that the FTC had not proven that the deal would negatively affect competitiveness, citing the 10-year commitment by Microsoft to keep Call of Duty on PlayStation, among other things.
According to a law professor cited by Bloomberg, an appeal would actually be warranted from the FTC’s perspective. Robert Lande, a professor at the University of Baltimore School of Law, told the news outlet that the law only requires the FTC to prove that the deal “may” lessen competition, rather than prove that it “will” or “is likely to,” and claimed that the judge used the wrong standard. If that’s the case, deals like Microsoft’s acquisition of ZeniMax and Bethesda and the resulting console exclusivity of games like Starfield could be ample enough proof that the deal “may” lessen competition.
But the deal’s deadline may cost the FTC its chance to appeal. According to the original terms of the acquisition, the deal must be closed by July 18, or Microsoft must be forced to pay Activision Blizzard a $3 billion “break up fee.” Even if the FTC officially submits an appeal today, it may not make it through the appeals process fast enough to stop the deal from going through.
