Appeals court denies FTC bid to temporarily halt Microsoft-Activision deal

The merger between Microsoft and gaming giant Activision Blizzard is likely to move forward after an appeals court denied an attempt by the Federal Trade Commission (FTC) to stop it on Friday.

The FTC argued that the $68.7 billion deal would harm competition in the gaming market, giving Microsoft — owners of the Xbox console system — complete control over popular video game franchises such as “Call of Duty,” “World of Warcraft” and “Overwatch.”

Microsoft is likely to pull those popular titles from rival PlayStation systems, the FTC claimed, making them only available on Xbox. Microsoft has denied those claims.

In a statement Wednesday, FTC spokesman Douglas Farrar said the deal poses a “clear threat … to open competition in cloud gaming, subscription services, and consoles.”

The acquisition is still being challenged by the United Kingdom’s trade authority. The deal has a July 18 deadline.

“The District Court’s ruling makes crystal clear that this acquisition is good for both competition and consumers,” Microsoft Vice Chairman and President Brad Smith said in a statement Wednesday, amid news that the FTC decided to appeal the court’s ruling allowing the merger.

“We’re disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward,” he said.

The purchase comes nearly two years after Microsoft acquired another large developer and publisher, ZeniMax Studios — parent company to “Fallout” and “The Elder Scrolls” developer Bethesda Softworks — in a $7.5 billion deal in 2021.