A US court denies the FTC's bid for a preliminary injunction to stop Microsoft's Activision deal, saying the FTC's theories of harm were unlikely to succeed
- A federal judge in San Francisco ruled in favor of Microsoft and Activision Blizzard, which have been trying to complete their $68.7 billion deal by July 18.
Context & Ripple Effects
The FTC had escalated from seeking a temporary restraining order to asking a federal court to halt the transaction before closing; its request for emergency merger relief put the agency's competition theories before the court on an accelerated timetable.
The ruling was a pivotal procedural win for Microsoft and Activision, though not the end of the dispute: the FTC subsequently appealed the decision that opened the path to closing.
First-order effects
- Microsoft and Activision can continue pursuing their $68.7 billion transaction without the requested preliminary federal block, removing the most immediate U.S. court obstacle.
- The FTC loses leverage from an injunction at the point when timing mattered most, while retaining its ability to challenge the ruling through appeal.
Second-order effects
- The decision puts pressure on the FTC to obtain emergency relief on appeal or pursue its underlying case without being able to prevent the deal from proceeding first; the Ninth Circuit later declined the agency's requested injunction.
- For Microsoft, the outcome makes the acquisition's proposed closing schedule more credible and shifts attention from whether a court will pause the deal to whether remaining regulatory processes can change its terms.
Third-order effects
- If courts repeatedly reject pre-closing challenges built on similar theories, merger enforcement will depend more heavily on agencies' ability to show specific, likely competitive harm on an expedited record.
- The case illustrates a broader tension in platform-market enforcement: agencies may seek to stop consolidation before it is consummated, but judicial standards for preliminary relief can determine whether that strategy has practical force.
The trend: This is one data point in the contest between more assertive merger enforcement and the high evidentiary bar regulators face when seeking to block major technology deals before closing.