President Trump’s antitrust cops ended a government effort to unwind Microsoft’s (MSFT) $69 billion acquisition of video game maker Activision Blizzard that began during the Biden administration.
The decision came Thursday when the Federal Trade Commission voluntarily dropped a lawsuit that Biden’s FTC boss Lina Khan first filed against the tie up in December 2022.
It was a major win for Microsoft, which became the third-largest video game company in the world by revenue behind Sony (SONY) and Tencent with its purchase of Activision, maker of the popular “Call of Duty” franchise.
The FTC had said initially that it wanted to block the deal because once Xbox owner Microsoft controlled “Call of Duty” it could exclude other gaming companies from accessing the content.
Microsoft President Brad Smith on X called the FTC’s retreat “a victory for players across the country and for common sense in Washington, D.C.”
The Microsoft challenge is not the only antitrust battle that the Trump administration is shedding from its predecessor’s caseload.
The FTC also dropped a suit that Biden’s FTC filed against PepsiCo (PEP) in the final days of the administration. The complaint alleged that PepsiCo unfairly offered a major retailer premium deals that it didn’t offer competing big box stores, in violation of the Robinson-Patman Act.
Multiple news organizations, citing sources, said the retailer at issue was Walmart (WMT).
“Taxpayer dollars should not be used for legally dubious partisan stunts. The FTC’s outstanding staff will instead get back to work protecting consumers and ensuring a fair and competitive business environment,” FTC Commissioner Andrew Ferguson said in a statement.
The Microsoft case, which was pending before the FTC’s in-house administrative court, had become an uphill battle for the regulator.
It was weakened in May when a federal appeals court sided with a lower court denying the FTC’s request to pause the deal from closing.
The FTC had previously suspended its administrative challenge to the deal in July 2023 after both a federal district court judge and a three-judge federal appellate court panel declined to grant the commission a preliminary injunction that would have kept the tie-up from happening as it battled the merger.
“The Commission has determined that the public interest is best served by dismissing the administrative litigation in this case,” FTC Secretary April Tabor said in a document filed with the court on Thursday.
The FTC had alleged that combining the two companies would harm competition in three gaming markets: game consoles, subscription content, and cloud gaming.
Historically, Activision’s games have been available across different gaming consoles, including Xbox, Nintendo Switch, and Sony’s Playstation.
Microsoft agreed to enter a legally binding contract to offer “Call of Duty” on the competing platforms to keep Call of Duty available on their platforms for 10 years.
Microsoft and Activison cleared a final hurdle from the UK’s Competition and Markets Authority (CMA) in October 2023 by negotiating a cloud gaming agreement.
Under the renegotiated terms, French gaming company Ubisoft Entertainment SA acquired the rights to Activision’s cloud gaming content for 15 years, ensuring that it would remain available on non-Windows operating systems – operating systems not owned by Microsoft.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
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