Summary
The Federal Trade Commission decided to move ahead with its in-house trial seeking to blockMicrosoftfrom acquiring Activision Blizzard. But since a San Francisco-based federalcourt ruled in favor of Microsoft’s Activision Blizzard acquisitionthis July, the FTC isn’t actually able to prevent the deal from going through, at least for the time being.
Although theFTC promptly appealed the verdict in the Microsoft trial, the 9th Circuit U.S. Court of Appeals has yet to make a decision on the matter. There is no legal limit for how long the court can deliberate on the issue, although its own website states that most cases are decided within three months to a year. Going by the lower end of that range, its decision likely won’t arrive before mid-October.
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Regardless of the verdict, the FTC now plans to move forward with its in-house hearing, having said as much in a September 26 order on continued adjudication. The timing of the trial still hinges on the 9th Circuit’s ruling, as it’s scheduled to begin 21 days after the second-instance verdict is issued. The appellate court previously denied an emergency stay that would have extended the FTC’s first and only temporary restraining order against the deal, which expired on July 14.Microsoft and Activision Blizzard recently agreed to extend the acquisition deadlineuntil October 18.
However, that extension wasn’t prompted by the FTC’s pushback, as it arrived days after the regulator was already defeated in federal court and left with no immediate options for preventing the deal. Instead, the new deadline was agreed in an effort to make room for Microsoft’s appeal against the British CMA’s decision to block the transaction. Although that process is still ongoing,Microsoft’s Activision Blizzard acquisition already won preliminary approval from the CMAin late September.
Assuming that decision is still standing in the coming weeks, the blockbuster buyout of Activision Blizzard is likely to be completed before its second deadline runs out.Microsoftis on the hook for a $4.5 billion breakup fee in case the deal falls through at this point. For context, that figure dwarfs Activision Blizzard’s best year on record, 2021, when the company posted $3.16 billion in profit.
As for the FTC, its newly revived attempt to block the transaction is looking like an uphill battle at this point. Even if its in-house trial ends with a ruling against the $68.7 billion deal, such a decision would still have to survive scrutiny from an actual court before the FTC would be allowed to break up the already combined entity.
