With Activision Blizzard having been officially acquired by Microsoft in 2023, you’d think the saga has ended, but it actually hasn’t, as the FTC is preparing to initiate a new proceeding in front of its own administrative law Judge as its last resort to undo the deal.
Said new trial is now scheduled to begin on July 21, 2025, after the United States Court of Appeals for the Ninth Circuit rejected the FTC’s appeal against the decision by the Northern District of California Court that paved the way to the acquisition in 2023.
Laymen could think that, since this new proceeding is held in front of the FTC’s own Administrative Law Court, the regulator may have an overwhelming home advantage, but Judge D. Michael Chappell just awarded Microsoft its first major victory before the real battle even begins.
In February 2024, the FTC filed a “motion in limine” asking the Judge to forbid Microsoft from introducing evidence at the hearing of the alleged procompetitive benefits of its agreements with third parties, including Ubisoft, Sony, Nintendo, Boosteroid, Nvidia Corporation, Cloudware, and Ubitus.
If successful, the motion would have prevented Microsoft’s counsel from using one of its most relevant weapons, as one of Microsoft’s main arguments is that the deals made with third parties result in the acquisition actually enhancing competition instead of damaging it.
Yet, the Judge just issued an order rejecting the FTC’s motion, mentioning that the regulator’s counsel has “failed to demonstrate that evidence of procompetitive
effects of Respondents’ agreements with third parties is clearly inadmissible on all potential grounds.”
It’s worth mentioning that this doesn’t mean that all the evidence mentioned will be admitted at the trial, but at the very least, Microsoft’s counsel is able to submit it and argue that it should be admitted. This is no small deal considering that the FTC attempted (and failed) to delete this whole part of the discussion in one fell swoop.
It’s worth mentioning that, considering the consummation of the Acquisition, the legal standards the FTC would have to meet to manage to break it up are likely extremely demanding, so the Commission will have to face a steep uphill battle, assuming that it’s really still determined to fight.
