The Federal Trade Commission (FTC) is once again challenging Microsoft’s $69 billion acquisition of Activision Blizzard, the renowned maker of the “Call of Duty” video game franchise. The FTC, dissatisfied with the federal judge’s previous decision allowing the acquisition, contends that the judge set the antitrust regulator’s standards too high.

Microsoft initiated the acquisition of Activision in January 2022, marking it as the largest deal in the history of gaming. Despite the FTC’s initial attempts to block the acquisition, Microsoft prevailed in the federal Northern District of California in July. Following regulatory approval in the UK in September, the deal concluded in October.

FTC Appeals Antitrust Decision

The FTC is now appealing the district court’s ruling, arguing that the judge applied an excessively high standard and erroneously relied on Microsoft’s agreements with rivals in the video game space as evidence that the merger wouldn’t impede competition. Microsoft had secured a deal with Sony, the owner of PlayStation, ensuring the continued availability of “Call of Duty” and other games on various platforms post-merger.

Microsoft is poised to counter the FTC’s arguments, asserting that the acquisition is not anti-competitive and that there is no evidence suggesting Microsoft would withhold the “Call of Duty” franchise from other gaming platforms.

FTC’s Antitrust Efforts Under Scrutiny

The FTC, under the Biden administration, has actively sought to block mergers and acquisitions, expressing concerns about potential reductions in competition that could lead to increased prices and limited choices for consumers. Despite these efforts, the FTC has faced challenges in court, with critics suggesting the agency may be overstepping its authority.

The Microsoft-Activision case stands out as a prominent antitrust challenge for the FTC. After the three-judge appellate panel, consisting of Daniel Collins and Danielle Forrest nominated by former President Donald Trump, and Jennifer Sung nominated by President Joe Biden, renders its decision, further appeals to the full Ninth Circuit Court of Appeals remain a possibility.

As the tech and gaming industries closely watch these legal proceedings, the outcome could have lasting implications for future mergers and acquisitions, setting precedents for antitrust regulation in the rapidly evolving landscape of technology and entertainment.

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