Microsoft Clears Major Hurdle As FTC Ends Effort To Block Activision Merger
On May 7, the Ninth Circuit upheld a decision allowing Microsoft’s $69 billion acquisition of Activision Blizzard to proceed, as the FTC dropped its efforts to block the merger. The FTC concluded that dismissing the case served the public interest. This decision follows broader regulatory changes under the Biden administration, which has targeted price discrimination and tech giants. Microsoft’s stock is currently down 1.06% at $450.31.
On May 7, the Ninth Circuit affirmed the decision of the United States District Court for the Northern District of California, FTC versus Microsoft Corp MSFT, denying the Commission’s application for a preliminary injunction to block Microsoft’s $69 billion acquisition of Activision Blizzard, Inc.
The Commission has now determined that the public interest is best served by dismissing the administrative litigation in this case.
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Microsoft sold the Xbox gaming console and offered a video game subscription service called Xbox Game Pass and a cloud-based video game streaming service. The agency alleged that the deal would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription and cloud-gaming business. The Commission withdrew the matter from adjudication in July 2023 and returned it to adjudication on Sept. 26, 2023.
Recently, the FTC also dropped a lawsuit against PepsiCo Inc. PEP for allegedly offering preferential pricing to major retailers like Walmart Inc. WMT. The case marked broader Biden administration efforts to target price discrimination.
The FTC also paused cases against CVS Health Corp CVS, Cigna Group CI, and UnitedHealth Group Inc UNH over pharmacy benefit manager practices, citing commissioner shortages after President Donald Trump‘s personnel changes.
President Trump named FTC Commissioner Andrew Ferguson his choice for FTC chair last December, replacing Lina Khan. This could potentially reshape the agency’s approach to tech regulation and antitrust enforcement.
Under Khan’s leadership, the federal firm has aggressively targeted tech giants, including Amazon.com Inc AMZN, Meta Platforms Inc META, and Alphabet Inc GOOGL.
Price Action: MSFT stock is down 1.06% at $450.31 at last check Friday.
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