FTC to Appeal Court Order to Let Microsoft Acquire Activision Blizzard

The Federal Trade Commission is appealing a ruling by a federal judge in San Francisco that, if it stands, will allow Microsoft’s proposed purchase of video game giant Activision Blizzard to proceed.

On Tuesday, Judge Jacqueline Scott Corley of the U.S. District Court for the Northern District of California shot down the FTC’s request for an emergency injunction against the $68.7 billion deal, which is set to close July 18.

In a notice to appeal the decision, filed with the 9th Circuit Court of Appeals on Wednesday, the FTC — as it has since its initial lawsuit last December — argues that the deal, which will give Microsoft ownership of franchises like “Call of Duty,” “Diablo” and “World of Warcraft,” would severely curtail competition with its rivals.

Activision Blizzard is currently “platform agnostic,” the FTC says, and as such the biggest console and operating system makers share confidential information with it about their platforms. Microsoft would gain access to some of that information in the deal, the FTC argues, giving it “the incentive and ability” to take advantage of it.

Sony has already cited this risk as the reason it won’t share advance information about its next console if the deal goes through.

The FTC also argues that Microsoft could limit access to Activision Blizzard games, either by making them exclusive to Microsoft platforms, or by making the experience worse on rival platforms. The agency cites examples of video game giant Zenimax, which Microsoft bought in 2020. Several Zenimax games have been made Microsoft exclusives and there are reports that “Elder Scrolls VI,” the upcoming next installment in blockbuster franchise, may also end up exclusive to Microsoft.

Microsoft insists this won’t happen, at least with “Call of Duty.” Last November, Microsoft lawyers justified making “Elder Scrolls VI” a Microsoft exclusive because it is a “mid-sized” game, but doing so wouldn’t make business sense for a series like “Call of Duty.”

Critics have noted that the “Elder Scrolls” series is, overall, hugely successful; in fact, the 2011 installment, “Skyrim,” is the 7th best-selling game of all time as of 2023. They also point to Activision Blizzard’s “Diablo IV,” which came out June 5 and in a first for the “Diablo” series, is not available on Mac.

In a statement provided to TheWrap, Activision Blizzard said, “The facts haven’t changed. We’re confident the U.S. will remain among the 39 countries where the merger can close. We look forward to reinforcing the strength of our case in court, again.”

Representatives for Microsoft didn’t immediately respond to a request for comment from TheWrap.

Pamela Chelin contributed to this report.

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