FTC appeals Microsoft-Activision court ruling, after judge allows sale

The Federal Trade Commission will appeal a decision made by a federal judge in California that overruled its attempt to block Microsoft from buying video game maker Activision, according to court documents filed on Wednesday.

On Tuesday, the judge ruled that Microsoft should be allowed to proceed with its roughly $69 billion acquisition as soon as this week. It was a major blow to the FTC, which had argued the merger would contribute to consolidation in tech and was anticompetitive because it could allow Microsoft to offer certain popular video game titles exclusively on its own Xbox gaming consoles.

Microsoft executives said in court they had no plans to limit customer access to video game titles, and the judge ultimately ruled in the company’s favor. But the FTC, which has gone after Big Tech companies aggressively under the Biden administration, plans to appeal that decision, according to new court documents. That appeal is likely to be filed soon, as the temporary order currently blocking the acquisition will expire in the coming days.

Microsoft did not immediately respond to a request for comment. The FTC declined to comment.

The decision in Microsoft’s favor, while not unexpected, is a major setback for antitrust regulators, who have pursued a new, more aggressive strategy under current chair Lina Khan. The FTC also sued to block Meta’s acquisition of augmented reality start-up Within, but a judge also decided to allow that acquisition to proceed.

The FTC’s approach on fighting consolidation in the tech industry is wide ranging.

It has brought actions again three times this year against Amazon, reaching two privacy settlements and suing the company for allegedly tricking customers into signing up for auto-renewing Prime memberships that are hard to cancel.

But its failure in the Microsoft case suggests the FTC faces a steep path to victory in its attempt to rein in big tech.

The acquisition of Activision, which owns “Call of Duty” among other popular games, will help Microsoft continue in its pursuit of expanding beyond its core business areas of personal and cloud computing.

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