US regulator has dropped a challenge to Microsoft’s $69 billion acquisition of Activision Blizzard

The FTC canceled its challenge to the $69 billion Activision agreement with Microsoft, claiming it was no longer in the public interest.

Declaring that the case was no longer in the public interest, the US Federal Trade Commission (FTC) has formally abandoned its lawsuit against Microsoft’s $69 billion acquisition of video game giant Activision Blizzard.

The government had earlier claimed the mega acquisition could hinder competition in the gaming industry, so Thursday’s announcement marked a dramatic reversal. Closed in 2023, the deal is still the biggest in the video game industry’s history.

The decision was hailed as “a victory for players across the country and for common sense in Washington, DC” by Microsoft President Brad Smith.

Because of its fears that the combination would give Microsoft an unfair advantage in the market, especially with its Xbox console and cloud-based gaming services, the FTC had attempted to prevent the agreement.

The organization asserted that the business might deny competitors access to Activision games, such as the wildly successful Call of Duty movie.

On May 7, however, the FTC lost a significant appeal when a court refused to grant a preliminary injunction that would have postponed the merger. Despite the possibility of pursuing a second trial to void the agreement, the agency has now chosen not to proceed.

“The FTC usually requests that a judge temporarily halt a new merger in order to conduct a thorough review,” an agency representative stated.

“However, once a deal closes, there is very little chance of it being reverted, so our resources need to be allocated appropriately.”

The choice to withdraw the case is part of a larger trend under FTC Chairman Andrew Ferguson, who is abandoning some of the enforcement tactics that his predecessor, Lina Khan, promoted.

The commission also dismissed a different case against PepsiCo on Thursday, alleging that the company engaged in price discrimination that favored Walmart.

A examination into whether marketers colluded to cut spending on social media site X, formerly known as Twitter, is one of the ways Ferguson is allegedly tailoring the agency’s enforcement strategy to better fit the goals of former President Donald Trump.