A US court has denied the FTC’s request to pause Microsoft’s deal for Activision

WASHINGTON, July 13 (Reuters) – A US federal court on Thursday denied the Federal Trade Commission’s request to order Microsoft (MSFT.O) to temporarily delay closing the $69 billion acquisition of Activision Blizzard (ATVI). .O), and showed the court file.

A federal judge earlier ruled against Microsoft on Tuesday, saying the agency failed to show that the deal would be illegal under antitrust law. The Federal Trade Commission appealed the loss late Wednesday, and Microsoft said it would fight that appeal.

Earlier Thursday, the FTC requested an injunction preventing the deal from closing even after the United States Court of Appeals for the Ninth Circuit ruled on a separate stay request filed with that court.

Any pending regulatory hurdle makes it likely that the agreement between Microsoft and Activision will expire on July 18th without completing the deal. After July 18, either company will be free to leave unless they negotiate an extension.

The FTC asked the court to decide on the temporary stay as soon as possible, noting that the current temporary restraining order on the deal was supposed to expire shortly before midnight Friday.

“We are disappointed that the FTC continues to pursue what has become a clearly weak case, and we will oppose further efforts to delay the ability to move forward,” Microsoft President Brad Smith earlier said in an emailed statement.

In its request for a temporary stay of Judge Jacqueline Scott Corley, the FTC argued its rejection of a preliminary injunction halting the transaction “raises serious and substantive issues for the appeals court to resolve.”

“The FTC is asking this court to order the merger pending pending the decision of the FTC’s appeal to the Ninth Circuit Court of Appeals. The request was denied,” the judge said in the order late Thursday.

The FTC said it is seeking a preliminary injunction to pause the transaction until an internal FTC judge can evaluate it. But Corley applied the standard required to permanently halt the deal instead, which the agency argued was inappropriate.

The FTC also said the judge misjudged the deal’s impact on multi-game subscriptions and the amount of credit it gave Microsoft for striking deals with competitors in order to save the proposed deal.

To address the agency’s concerns, Microsoft agreed to license “Call of Duty” to competitors, including a 10-year contract with Nintendo (7974.T), contingent upon the merger closing.

The deal, the largest in the history of the video game industry, was also suffering in Britain until this week. After the California ruling, Britain’s Competition and Markets Authority, which opposed the deal, said a restructured deal between Microsoft and Activision Blizzard could satisfy its concerns, subject to a new investigation.

It is rare for a merger battle to reach an appeals court. However, the FTC appealed a ruling more than 10 years ago when it lost its battle against Whole Foods’ purchase of wild oats. The agency settled with the companies before the Court of Appeal issued its decision.

(Cover) By Diane Bartz and David Shepherdson. Additional reporting by Kanishka Singh; Editing by Tim Ahmann, Josie Kao, and Jimmy Fried

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