FTC Appeals Microsoft-Activision Ruling. But Time Is Running Out.

The FTC filed its appeal on Thursday after filing a notice it would be doing so on Wednesday. A federal judge ruled earlier this week that the merger wouldn’t hurt competition between videogame platforms.
Microsoft
asked the 9th Circuit to issue an injunction to prevent them the companies from moving forward.

The FTC has to act quickly because a hold on the deal lifts on Friday, while Microsoft (ticker: MSFT) and Activision (ATVI) have their own July 18 deadline to finalize the acquisition.

U.S. District Judge Jacqueline Scott Corley, the lower court judge who denied the agency’s request for a preliminary injunction that would have stopped the deal from closing, said the FTC would need an emergency stay from the 9th Circuit to extend a temporary hold on the deal.

The FTC said earlier in the week that it was disappointed in the district court ruling, “given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles,” and said it will keep fighting to preserve competition and protect consumers, spokesman Douglas Farrar said.

The agency told the 9th Circuit that it and the public would be harmed if the merger is allowed to proceed. “If a preliminary injunction is not granted, Microsoft and Activision can begin to share confidential business information and long-term strategic planning information and can begin to make plans for exclusivity of Activision content,” the FTC said in its court filing.

Microsoft President Brad Smith said: “We’re disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward.”

Microsoft shares rose 1.6% on Thursday. Activision stock fell 0.5%.

Write to Brian Swint at [email protected]