The Federal Trade Commission (FTC), now led by Republicans, has decided to drop its efforts to block Microsoft’s acquisition of Activision Blizzard, the company behind the popular Call of Duty video game series. This decision was announced on Thursday, with the FTC stating that it believes dismissing the case serves the public interest better.
This marks a significant shift from the previous administration under President Biden, which had initiated legal action against the merger. Earlier on the same day, the FTC also announced it was stepping back from a lawsuit against PepsiCo, which had been filed by the Democratic-led FTC in January.
Microsoft’s $69 billion deal to acquire Activision Blizzard, announced in January 2022, was one of the largest tech acquisitions ever. The goal was to enhance Microsoft’s Xbox gaming console, which has struggled to compete with Sony’s PlayStation and Nintendo systems. The FTC, under former Chairwoman Lina Khan, had raised concerns that the merger would allow Microsoft to limit competition by restricting access to Xbox and its subscription services.
In July 2023, a federal district court in Northern California rejected the FTC’s request to halt the acquisition, and a federal appeals court upheld that decision earlier this month. Meanwhile, Microsoft completed the acquisition in October 2023 after receiving approval from regulatory authorities in the United Kingdom, who had also considered blocking the deal.
Brad Smith, Microsoft’s vice chairman, expressed gratitude for the FTC’s decision, calling it a win for gamers and a sign of common sense in Washington.
The FTC’s current composition includes three Republican commissioners, and there are still two Democratic positions that remain unfilled. This shift in leadership has led to a reevaluation of several Biden-era policies. In the case of PepsiCo, the current FTC Chairman Andrew Ferguson criticized the previous administration’s haste in authorizing the lawsuit, describing it as a “dubious political stunt.”
Despite these changes, the FTC has continued to uphold some Biden-era initiatives, such as a new rule requiring companies to clearly disclose fees for services like ticket sales and rentals. This indicates that while the commission is moving away from some previous actions, it is not entirely abandoning the policies established under the last administration.