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FTC asks appeals court to suspend Microsoft-Activision deal

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(Bloomberg) – The U.S. Federal Trade Commission has urged an appeals court to delay the acquisition of Microsoft Corp. On Activision Blizzard Inc. worth $69 billion as the agency’s challenge for the biggest toy deal of all time still hangs in the balance.

The FTC wants the San Francisco Ninth Circuit Court of Appeals to overturn a July 10 order issued by a trial court judge that allowed the companies to advance to the July 18 closing deadline.

Completion of the proposed transaction would irrevocably alter the status quo and, if completed before the FTC’s appeal is heard, would irreparably harm the FTC’s ability to seek effective relief from the public if that the transaction violated antitrust laws,” FTC attorneys wrote in the filing Thursday.

Earlier Thursday, U.S. District Judge Jacqueline Scott Corley denied the Federal Trade Commission’s request to extend a pause on the deal while it appeals. Barring action by the court of appeals, Microsoft and Activision can complete the transaction beginning at 11:59 p.m. in San Francisco on July 14.

The Federal Trade Commission has not backed down in an antitrust battle that is a major test of its ability to block big tech deals in court after the agency lost a takeover challenge to Meta Platforms Inc. earlier. This year.

FTC Chairman Lena Khan defended the agency’s decision to appeal the ruling earlier Thursday during a House Judiciary Committee hearing. Republicans have criticized the FTC’s record of merger losses, questioning whether it was “losing on purpose” to influence Congress to pass antitrust legislation.

“We fight vigorously when we believe there is a violation of the law,” she said. “When we receive a judgment to the contrary, our teams carefully review the text of the opinion and see if there are any errors on legal issues that warrant an appeal. »

Read more: FTC’s Khan called GOP attack on deals and ethics ‘tyrant’

The appeal creates another legal hurdle for Microsoft by pushing it to reach a deal that would help it expand its presence in mobile gaming and rank third in the global gaming market after Tencent Holdings Ltd. and Sony Corp.

The Federal Trade Commission is seeking to advance an administrative antitrust challenge to the deal that was due to begin early next month. Microsoft also remains stuck in limbo with the UK’s Competition and Markets Authority after that agency vetoed the deal in May.

Read more: Microsoft cleared to buy Activision in US as UK halts fight

After Corley’s ruling, the CMA said it was prepared to re-evaluate Microsoft’s proposals and agreed to halt the companies’ appeals to the Competition Appeal Tribunal. The suspension gives companies an opportunity to offer potential solutions aimed at allaying fears in the UK that the takeover would stifle competition. But the restructuring of the deal could also lead to a new investigation by Britain’s antitrust watchdog.

© 2023 Bloomberg LP

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