FTC Brings Back In-House Case Vs Microsoft (That Won’t Accomplish Anything)

28.09.2023 - 11:01 / gameranx.com / Lulu Cheng Meservey

The FTC has brought back their in-house case against the Microsoft – Activision merger deal. Their decision to do so, however, doesn’t seem to have a reasonable endgame.

The FTC originally wanted to hold such a hearing to make Microsoft defend their acquisition, to be heard by FTC judge D. Michael Chappell. However, before the first dates of that case even came up, the FTC themselves suddenly filed an injunction. This injunction was paired with a restraining order, that the FTC filed shortly after the EU approved of the merger.

Ultimately, the FTC lost this case in front of San Francisco District Judge Jacqueline Scott Corley. Because they failed to file the injunction, and the EU approved the deal already, Microsoft was actually already capable of closing their deal.

Microsoft’s choice to delay finalizing the deal was to show good faith with the CMA, the remaining dissenting regulator that could still block the deal. Microsoft could have chosen to close the deal over the CMA, and deal with the legal limitations after the fact. Their decision not to do so is likely motivated by a desire to keep a civil relationship with the CMA later, for future competition and antitrust concerns.

So, this case the FTC is bringing back will be with Judge Chappell, but because of the rules the FTC set themselves, Judge Chappell’s ruling will have no real authority to block the deal if he decides against it.

So, maybe the FTC isn’t exactly expecting this case to have that power. They appealed Judge Corley’s decision with the 9^th court of appeals. While unlikely to win there, it is their remaining recourse to stop this case. Maybe the FTC is hoping that their in-house case and Judge Chappell’s decision will affect the 9^th court’s decision as well.

But even then, such a thing happening is really unlikely. As Stephen Totilo notes, the 1^st date of the 9^th court appeal hearing won’t be up until December 6, way after the deadline for Microsoft and Activision to finalize the deal.

FTC spokesperson Victoria Graham said that “The FTC continues to believe this deal is a threat to competition.” For their part, Microsoft shared this message via spokesperson Rebecca Dougherty:

“We still anticipate that we will close the transaction by October 18, and we have full confidence in our case and the deal’s benefits to gamers and competition.”

Finally, Activision Blizzard chief communications officer Lulu Cheng Meservey shared this statement on Twitter:

“In response to questions about this: we’re focused on working with Microsoft toward closing.

How the FTC uses limited taxpayer resources is their decision.”