Court validates Microsoft's $69 billion Activision Blizzard acquisition

In the United States, a significant legal development took place concerning Microsoft's acquisition of Activision Blizzard, a major player in the gaming market. On a Wednesday in early May 2025, the 9th U.S. Circuit Court of Appeals in San Francisco upheld a lower court's ruling that denied the Federal Trade Commission's (FTC) request for a preliminary injunction to halt Microsoft's $69 billion purchase of Activision Blizzard. This court decision was the result of a legal battle that began when the FTC filed an antitrust lawsuit in 2022, aiming to challenge the merger and assert that it would reduce competition in the gaming industry. The court's ruling emphasized that the FTC had failed to demonstrate a likelihood of success in its claims regarding potential competition restrictions resulting from the acquisition. The case was presided over by a three-judge panel, which unanimously agreed that the lower court had applied the appropriate legal standards in its earlier decision. U.S. District Judge Jacqueline Scott Corley had previously decided in July 2023 not to block the merger, concluding that the FTC did not convincingly show that the acquisition would significantly lessen competition in crucial market areas such as video game subscription services and cloud gaming. The FTC initiated its legal challenge during the Biden administration but later paused an internal administrative action concerning the merger as it awaited the appellate court's decision. This acquisition became notable as it represented the largest-ever deal in the video gaming sector. The conclusion of the merger was facilitated by regulatory approvals in the UK and other international markets, despite ongoing scrutiny from the FTC in the U.S. The acquisition was seen as a move that could strengthen Microsoft's position in the competitive gaming landscape and potentially disadvantage rivals, especially in relation to their Xbox console and subscription services associated with gaming. This landmark ruling underscores the ongoing tensions between major technology companies and regulatory bodies overseeing competition and market practices. As the landscape of digital gaming evolves, the implications of this merger may resonate across the industry, shaping future acquisitions and regulatory approaches. The decision also highlights the pivotal role of judicial interpretation of antitrust laws and the challenges regulatory agencies face when attempting to inhibit large mergers that raise concerns about competition.