NATIONAL NEWS

Microsoft moves closer to completing $69 billion Activision takeover after court rebuffs regulators

Jul 14, 2023, 7:20 PM | Updated: 7:25 pm

File - The logo for Microsoft, and a scene from Activision "Call of Duty - Modern Warfare," are sho...

File - The logo for Microsoft, and a scene from Activision "Call of Duty - Modern Warfare," are shown in this photo, in New York, Wednesday, June 21, 2023. A judge handed Microsoft a big victory on Tuesday, declining to stop its $69 billion takeover of video game maker Activision Blizzard. (AP Photo/Richard Drew, File)
Credit: ASSOCIATED PRESS

(AP Photo/Richard Drew, File)

A U.S. appeals court on Friday rejected a bid by federal regulators to block Microsoft from closing its $68.7 billion deal to buy video game maker Activision Blizzard, paving the way for the completion of the biggest acquisition in tech history after a legal battle over whether it will undermine competition.

In a brief ruling, a three-judge panel on the 9th U.S. Circuit Court of Appeals concluded there were no grounds for issuing an order that would have prevented Microsoft from completing its nearly 18-month-old deal to take over the maker of popular video games such as Call of Duty.

Microsoft didn’t immediately respond to a request for comment. The Redmond, Washington, software maker is facing a $3 billion termination fee if the deal isn’t completed by Tuesday.

The appeal filed by the U.S. Federal Trade Commission was a last-ditch effort from antitrust enforcers to halt the merger after another federal judge earlier this week ruled against the agency’s attempt to block it. The FTC was seeking an injunction to prevent Microsoft from moving to close the deal as early as this weekend.

The FTC declined to comment on the ruling.

U.S. District Judge Jacqueline Scott Corley’s ruling, published Tuesday, said the FTC hadn’t shown that the deal would cause substantial harm. She focused, in part, on Microsoft’s promises and economic incentive to keep Call of Duty available on rivals to its own Xbox gaming system, such as Sony’s PlayStation and Nintendo’s Switch.

In its appeal, the FTC argued Corley made “fundamental errors.”

“This case is about more than a single video game and the console hardware to play it,” the FTC said. “It is about the future of the gaming industry. At stake is how future gamers will play and whether the emerging subscription and cloud markets will calcify into concentrated, walled gardens or evolve into open, competitive landscapes.”

The case has been a difficult test for the FTC’s stepped-up scrutiny of the tech industry’s business practices under its chairperson, Lina Khan, appointed in 2021 by President Joe Biden. Standing legal doctrine has favored mergers between companies that don’t directly compete with one another.

The FTC said Corley, herself a Biden nominee, applied the wrong legal standard by effectively requiring its attorneys to prove their full case now rather than in a trial due to start in August before the FTC’s in-house judge.

It was the FTC, however, that had asked Corley for an urgent hearing on its request to block Microsoft and Activision Blizzard from rushing to close the deal. The agency’s argument was that if the deal closed now, it would be harder to reverse the merger if it was later found to violate antitrust laws.

In its response to the appeal, Microsoft countered that it could easily divest Activision Blizzard later if it had to. It has long defended the deal as good for gaming.

The deal still faces an obstacle in the United Kingdom, though one it now appears closer to surmounting.

British antitrust regulators on Friday extended their deadline to issue a final order on the proposed merger, allowing them to consider Microsoft’s “detailed and complex submission” pleading its case.

The Competition and Markets Authority had rejected the deal over fears it would stifle competition for popular game titles in the fast-growing cloud gaming market.

But the U.K. watchdog appears to have softened its position after Corley thwarted U.S. regulators’ efforts to block the deal.

The authority says it has pushed its original deadline back six weeks to Aug. 29 so it could go through Microsoft’s response, which details “material changes in circumstance and special reasons” why regulators shouldn’t issue an order to reject the deal.

___

AP Technology Writer Michael Liedtke contributed to this story.

KSL 5 TV Live

National News

Boeing's Starliner spacecraft...

Jackie Wattles, CNN

Two astronauts wait to come home as Boeing races to understand spacecraft issues. Here’s what’s at stake

Two test pilots helming the inaugural crewed flight of Boeing’s Starliner spacecraft are in a tentative position — and so is Boeing’s reputation in spaceflight.

2 hours ago

Matera, Italy, has been a UNESCO World Heritage site for more than 30 years.
Mandatory Credit:	Poik...

Angelica Chiara Yazbeck and Louis Mian, CNN

Historic building in Italy damaged by parkour tourists

Jumping from building to building in an ancient city might seem like a dream for those who practice parkour — a sport that involves making it past obstacles — but it can cause damage to historic buildings.

2 hours ago

Community members in Denver's Central Park neighborhood have a lot of questions after discovering a...

Karen Morfitt, KCNC

Registered sex offender found operating ice cream truck in Denver

Community members in Denver's Central Park neighborhood have a lot of questions after discovering a registered sex offender was operating the neighborhood ice cream truck.

3 hours ago

Tuesday February 9, 2006. Photo by Scott G. Winterton / Deseret Morning News.The Ten Commandments m...

Sara Cline, Associated Press

New Louisiana law requires that The Ten Commandments must be displayed classrooms

Louisiana has become the first state to require that the Ten Commandments be displayed in every public school classroom.

3 hours ago

Tropical Storm Alberto has formed in the southwestern Gulf of Mexico, the first named storm of what...

Jaime stengle and Mariana Martinez Barba

Tropical Storm Alberto forms in southwest Gulf, 1st named storm of the hurricane season

Tropical Storm Alberto has formed in the southwestern Gulf of Mexico, the first named storm of what is forecast to be a busy hurricane season.

6 hours ago

An air tanker soars through a large plume of smoke over and around wildfire-affected areas in the v...

MORGAN LEE Associated Press

At least 1 dead in New Mexico wildfire that forced thousands to flee, governor’s office says

Thousands of southern New Mexico residents fled a mountainous village as a wind-whipped wildfire tore through homes and other buildings.

7 hours ago

Sponsored Articles

Photo courtesy of Artists of Ballet West...

Ballet West

The rising demand for ballet tickets: why they’re harder to get

Ballet West’s box office is experiencing demand they’ve never seen before, leaving many interested patrons unable to secure tickets they want.

Electrician repairing ceiling fan with lamps indoors...

Lighting Design

Stay cool this summer with ceiling fans

When used correctly, ceiling fans help circulate cool and warm air. They can also help you save on utilities.

Side view at diverse group of children sitting in row at school classroom and using laptops...

PC Laptops

5 internet safety tips for kids

Read these tips about internet safety for kids so that your children can use this tool for learning and discovery in positive ways.

Women hold card for scanning key card to access Photocopier Security system concept...

Les Olson

Why printer security should be top of mind for your business

Connected printers have vulnerable endpoints that are an easy target for cyber thieves. Protect your business with these tips.

Modern chandelier hanging from a white slanted ceiling with windows in the backgruond...

Lighting Design

Light up your home with these top lighting trends for 2024

Check out the latest lighting design trends for 2024 and tips on how you can incorporate them into your home.

Technician woman fixing hardware of desktop computer. Close up....

PC Laptops

Tips for hassle-free computer repairs

Experiencing a glitch in your computer can be frustrating, but with these tips you can have your computer repaired without the stress.

Microsoft moves closer to completing $69 billion Activision takeover after court rebuffs regulators