Report from Reuters
In Brief – A three-judge panel of the Ninth Circuit Court of Appeals has rejected the Federal Trade Commission’s effort to overturn District Judge Jacqueline Scott Corley’s 2023 decision to turn down the regulator’s motion to block Microsoft’s $69 billion deal to buy videogame giant Activision-Blizzard while it challenged the acquisition in its internal court system. Corley ruled that the FTC failed to prove that Microsoft would have blocked access to popular titles such as Call of Duty on hardware owned by other gaming brands, as well as rejecting their arguments that the deal would have lessened competition in gaming subscription services and cloud streaming. Microsoft’s acquisition of Activision was completed in October of 2023, following the approval by the European Commission that May, Judge Corley’s ruling in July, and finally a reversal by the UK Competition and Markets Authority. Nevertheless, the Lina Khan-led FTC continued to battle away in court to try to overturn the Corley decision that stymied their effort to block the acquisition.
Context – Microsoft prevailed over challenges to their Activision acquisition in part because of market factors relevant to judicial antitrust review, including that they were not the top provider in any meaningful video game market, that the game creator market had many providers, and that their chief antagonist held a larger market share in game consoles and often made game titles exclusive. At the same time, Microsoft also engaged in a global good behavior campaign aimed at progressive regulators. It helped in Europe, where they won the key approval from the Commission. Today, Microsoft is a “gatekeeper” under the EU Digital Markets Act with Windows OS and LinkedIn regulated as “core platform services”. And the company continues to pursue its good behavior strategy, for example recently publicly expressing their commitment to complying with EU laws and regulatory decisions often criticized by other US tech giants and the Trump Administration. That earned plaudits from European Commission Vice President Teresa Ribera who heads EU competition enforcement and is a digital policy leader.