Two months after the US Federal Trade Commission stopped proceedings to block Microsoft’s $69 billion dollar acquisition of gaming studio Activision Blizzard, the federal agency has revived its challenge.
In a filing issued Wednesday, the FTC set a new schedule for hearings to be held in front of an administrative law judge in what amounts to an in-house trial at the government agency. The renewed legal challenge comes after the UK’s Competition and Markets Authority (CMA) reversed its own earlier decision to block the ruling, releasing a statement on September 22 that indicated that concessions made by Microsoft would be enough for the regulator to approve the deal.
Meanwhile, the FTC is pursuing its challenge on two fronts — via its own proceedings and through federal court. The FTC had originally started its own administrative proceedings last December to block the Microsoft-Activision deal, and while that process played out it asked the US District Court for the Northern District of California to issue a temporary injunction to stop the deal from being completed. That request was denied and in July the FTC appealed the decision in the Ninth Circuit Court of Appeals, which is expected to issue its ruling soon.
Shortly after the FTC lodged its appeal in Ninth Circuit court in July, it halted its own proceeding, but Wednesday's order reinstates it. The newly reinstated legal challenge is due to be heard 21 days after the Ninth Circuit rules on the appeal regarding the injunction request.
"The FTC continues to believe this deal is a threat to competition and we are placing this matter on the Commission’s Part 3 calendar ahead of our ongoing federal court appeal, but our current focus is on the federal appeal process,” according to a statement issued by FTC spokesperson Victoria Graham.
What this means is if the federal appeal is rejected, the Activision deal can go through, but that the FTC, through its internal proceeding with an administrative law judge, can potentially unwind the deal later.
Meanwhile, Microsoft is maintaining an upbeat stance.
Microsoft expects Activision deal to close
"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,” a Microsoft spokesperson said.
Microsoft's confidence comes in the wake of the UK CMA's approval last week.
“Microsoft has now substantially restructured the deal, taking the necessary steps to address our original concerns," Sarah Cardell, CEO of the CMA, said in comments published last week. The proposals put forward by Microsoft and accepted by the CMA include relinquishing control of cloud gaming rights for Activision’s key content and selling the gaming studio’s cloud gaming rights to third party video games publisher Ubisoft.
The EU Commission also approved the deal in May of this year, meaning the FTC is now the only regulator globally to still be actively trying to block the acquisition from taking place.
“The Commission has determined that the public interest warrants that this matter be resolved fully and expeditiously. Therefore, the Commission is returning this matter to adjudication,” the FTC wrote in its Wednesday filing.