FTC drops lawsuit against Microsoft over Activision Blizzard acquisition

The Federal Trade Commission (FTC) is dropping its lawsuit against Microsoft’s acquisition of Activision Blizzard. The regulator says not continuing the administrative proceedings of the lawsuit is in the public interest.

“The Commission has determined that the public interest is best served by dismissing the administrative litigation in this case. Accordingly, it is hereby ordered that the complaint in this matter be, and it hereby is, dismissed,” the FTC says in a legal document, without providing any further details.

In January 2022, Microsoft announced its plans to acquire video game maker Activision Blizzard. The two companies reached an agreement that Microsoft would pay $68.7 billion for the acquisition, the biggest one in the video game industry's history.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” Satya Nadella, CEO of Microsoft, said in a statement at the time.

Both Microsoft’s competitors and market authorities, including the Competition and Markets Authority (CMA), had reservations about this deal. Britain’s supervisor argued that gamers would have to pay higher prices, be left with fewer choices, and experience less innovation.

“A merger could make Microsoft even stronger in cloud gaming, stifling competition in this growing market and harming UK gamers who cannot afford expensive consoles,” the CMA concluded.

The merger was therefore blocked by the watchdog in the United Kingdom in April 2023. In the fall, when Microsoft promised to make some adjustments, the CMA still approved the acquisition.

In May 2023, the European Commission gave the green light for the acquisition of Activision Blizzard by Microsoft.

“The commitments offered by Microsoft will enable, for the first time, the streaming of such games in any cloud game streaming services, enhancing competition and opportunities for growth,” Margrethe Vestager, executive vice-president in charge of competition policy, said in a statement.

That same year, the FTC filed a lawsuit in which it tried to have the acquisition thoroughly investigated first. The market regulator lost its lawsuit, but decided to appeal the court’s decision.

Last week, the Ninth Circuit ruled that the appeal was rejected. Therefore, the FTC has decided to halt any further legal actions to prevent the merger.