By Leah Nylen | Bloomberg
The Federal Trade Commission filed a notice in court that it intends to appeal a ruling by a federal judge in California allowing Microsoft Corp. to move forward with its $69 billion acquisition of Santa Monica-based Activision Blizzard.
The FTC will ask the Ninth Circuit Court of Appeals in San Francisco to overturn US District Judge Jacqueline Scott Corley’s finding that the blockbuster game deal won’t thwart competition in the markets for console, subscription and cloud gaming and harm consumers.
Corley on Tuesday denied the agency’s request for a preliminary injunction that would have stopped the takeover from closing before a July 18 deadline. She extended a temporary restraining order that blocks Microsoft from closing the deal until midnight US West Coast time on Friday.
SEE MORE: Why Microsoft’s $69B Activision Blizzard buy could shake up gaming
The FTC’s legal challenge to the tie-up is part of an effort by Commission Chair Lina Khan to more aggressively police mergers, particularly those by the biggest tech platforms.
“The facts haven’t changed,” Activision said Wednesday in a statement. “We’re confident the US will remain among the 39 countries where the merger can close. We look forward to reinforcing the strength of our case in court, again.”
Microsoft President Brad Smith said the company is disappointed that “the FTC is continuing to pursue what has become a demonstrably weak case.”
“The district court’s ruling makes crystal clear that this acquisition is good for both competition and consumers,” he said in a statement.
Read More: Microsoft Set for New Shot at Winning UK Over on Activision
Robert Lande, a professor at the University of Baltimore School of Law, said Tuesday that Corley was too strict about the level of certainty she required from the FTC’s case. The law only requires the agency show that a deal “may” substantially lessen competition, not that it “will” or “is likely to,” he said.
“I believe the judge evaluated the case using the wrong standard and I believe the FTC should appeal,” said Lande, who gave a lecture at the FTC in March on research into how courts have applied that antitrust standard to mergers.
Stanford Law Professor Doug Melamed, however, said he believes it’s unlikely the appeals court would rule before the deal’s deadline.
“It’s extremely unlikely that the FTC could persuade the Court of Appeals to enjoin the merger before July 18,” said Melamed, a former Justice Department antitrust official.
The case is Federal Trade Commission v. Microsoft Corp., 3:23-cv-02880, US District Court, Northern District of California (San Francisco).
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