US FTC’s Appeal Against Microsoft’s Acquisition of Activision Blizzard Has Been Denied

While Microsoft’s acquisition of Activision Blizzard has been considered complete for all intents and purposes, there was still some lingering doubt owing to an appeal for an an injunction that had been filed by the US Federal Trade Commission (FTC) back in 2023 that had been denied.

According to Bloomberg, the appeal has also now been denied by the 9th Circuit US Court of Appeals. The appeal was rejected by the court, stating that the acquisition of Activision Blizzard by Microsoft was not in violation of any antitrust laws in the US. Judge Daniel P. Collins wrote in an opinion that the appeal was denied because the FTC hadn’t shown the “likelihood of success on the merits as to any of its theories,” with regards to antitrust violations.

The major bone of contention for the FTC was that, once the acquisition was completed, Microsoft would prevent studios under the Activision Blizzard umbrella from releasing their games on to non-Microsoft platforms like Sony’s PlayStation and Nintendo’s Switch. However, when the injunction had been denied back in 2023, the judge at the time noted that Microsoft making its games playable over the cloud dispelled the issue.

When it came to releasing future games exclusively on Xbox platforms, the judge also noted that it is standard practice in the gaming industry to release software exclusively for a platform that the company would like to promote. The judge also brings up the fact that, when compared to primary competitors to Xbox in the form of Sony and Nintendo, Microsoft has fewer exclusive games than the other companies do.

“All major manufacturers have engaged in this practice,” Collins wrote, continuing that competitors like Sony and Nintendo have “both have significantly higher number of exclusive games on their platform than [Microsoft] does.”

The report by Bloomberg also notes that this recent denial of appeal might have more long-term effects in how the FTC would tackle concerns about deals between companies in the technology space moving forward. While no immediate effect has been noted for now, an administrative trial in the in-house court at the FTC is also likely to be dismissed.

Microsoft’s acquisition of Activision Blizzard had been officially considered “complete’ back in October 2023. In a post welcoming the new studios under the Xbox banner, Microsoft Gaming head Phil Spencer spoke about wanting to create “new worlds and stories” together. In January 2024, Microsoft reported a 49 percent growth in gaming revenue in the wake of the acquisition. However, this also came in the wake of layoffs affecting 1,900 members of staff across Microsoft’s gaming division.

In February 2024, Spencer also spoke about wanting to bring more games from studios under Activision Blizzard, as well Bethesda, to PC and Xbox Game Pass on day one of release. While he didn’t necessarily say that Call of Duty would come to the subscription service, he did speak about “back-end work” happening behind the scenes at the time to facilitate bringing in Activision Blizzard titles to the service.