U.S. appeals court refuses FTC request to pause Microsoft deal for Activision

A U.S. appeals court on Friday rejected the Federal Trade Commission’s request that it order Microsoft to temporarily hold off on closing its US$69 billion purchase of “Call of Duty” maker Activision Blizzard.

The appeals court decision removes one of the few remaining hurdles stopping Xbox maker Microsoft from expanding its gaming business by closing its deal to buy Activision.

The FTC had also asked Judge Jacqueline Scott Corley of the U.S. District Court in northern California for a stay but she rejected that request late on Thursday.

The deal, the largest in the history of the video game industry, still needs to be approved in Britain.

The merger agreement between Microsoft and Activision will expire on July 18. After July 18, either company will be free to walk away from the deal unless they negotiate an extension.

In the U.K., the Competition and Markets Authority opposes the transaction on concerns about the impact on competition in cloud gaming. On Friday it received a “detailed and complex” new proposal from Microsoft, and extended its deadline for a final ruling to Aug. 29, although it said it would aim to do it as soon as possible.

In the United States, the FTC had argued the deal would hurt consumers whether they played video games on consoles or had subscriptions because Microsoft would have an incentive to shut out rivals like Sony Group. Microsoft responded to that by offering 10-year licences to rivals.

But on Tuesday, Judge Corley ruled the deal was legal under antitrust law and declined the FTC request to slap a preliminary injunction on it to give the FTC time to take it before an internal FTC judge in August.

(Reporting by Diane Bartz; Editing by Sandra Maler)