The FTC is losing an appeals court bid to temporarily block the Microsoft-Activision deal

In a victory for Microsoft, the US Court of Appeals for the Ninth Circuit late Friday to reject The Federal Trade Commission has appealed a judge’s decision that would have prevented the software maker from completing the $68.7 billion acquisition of video game publisher Activision Blizzard.

Microsoft is still working to resolve concerns about the deal from the UK’s Competition and Markets Authority. Both companies were looking to close the deal by July 18th.

A federal judge in San Francisco, after five days of court hearings, ruled against the FTC on Tuesday, and the federal agency filed its appeal on Wednesday.

The FTC sued to block the acquisition last December, and then filed an emergency lawsuit last month before the deal’s July 18 deadline. The FTC argued that the deal was anti-competitive because Microsoft could make some of its games exclusive to its Xbox game consoles or reduce the experience of Activision games like popular Call of Duty titles on competing services if the deal closes. Microsoft said it would make the games more widely available instead.

In an emergency motion filed with the Ninth Circuit on Thursday, the FTC said the district judge “denied preliminary relief, applying the wrong legal standard: The court effectively required the FTC to establish its full case on the merits with the court acting as arbiter of legality.” merger.” The agency requested a temporary injunction while the court considered an appeal of the district court’s decision.

Under Lena Khan’s leadership, the FTC has lost other battles with tech companies, including its efforts to block Meta Platforms from buying the virtual reality fitness app Inside.

Representatives for the FTC and Microsoft did not immediately respond to requests for comment on the ruling.

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