Last month, we discussed where things stand regarding Microsoft’s proposed $69 billion acquisition of Blizzard, Inc. (“Activision”) in light of domestic and international challenges to the proposed deal. This week, the closely-watched merger encountered another obstacle, as the FTC issued an order returning its challenge to administrative adjudication.

In the parallel action initiated in federal court, the FTC’s bid for a preliminary injunction of the proposed merger was rejected by Judge Jacqueline Scott Corley of the Northern District of California on July 10, 2023. As a reminder, here’s a timeline of the actions:

--December 8, 2022: The FTC issues an administrative complaint seeking to block the proposed merger because with “control of Activision’s content, Microsoft would have the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition—including competition on product quality, price, and innovation.”

--June 12, 2023: The FTC files a motion for a preliminary injunction of the proposed merger in the Northern District of California.

--June 22, 2023: Evidentiary hearing on the FTC’s motion for a preliminary injunction begins in the Northern District of California before Judge Corley.

--July 10, 2023: Judge Corley denies the FTC’s motion for a preliminary injunction, reasoning that the FTC is not likely to succeed on the merits of its claim.

--July 14, 2023: The Ninth Circuit denies the FTC’s motion for a temporary injunction pending appeal of the District Court opinion.

--July 20, 2023: The FTC pauses its administrative complaint following its unsuccessful motion for a preliminary injunction.

--September 26, 2023: The FTC reopens its administrative challenge, reasoning that “the public interest warrants that this matter be resolved fully and expeditiously.”

The schedule for the reopened challenge is tied to the Ninth Circuit’s review; the FTC will hold a public virtual evidentiary hearing before Chief Administrative Law Judge D. Michael Chappell 21 days after the Ninth Circuit issues its decision on the review of the preliminary injunction denial. Currently, the Ninth Circuit is reviewing briefs from the parties, including amici, and has scheduled an oral argument for December 6, 2023.

As reported by Bloomberg Law, one FTC official, Victoria Graham, said that the “FTC continues to believe this deal is a threat to competition.” Graham explained that although the FTC is placing the issue on the Commission’s calendar, “our current focus is on the federal appeal process.”

We will continue to monitor developments in Microsoft’s proposed acquisition of Activision.