FTC Drops Challenge Against Microsoft’s $69B Activision Deal, Citing Public Interest

The U.S. Federal Trade Commission (FTC) has officially dropped its case against Microsoft’s (NASDAQ:MSFT) $69 billion acquisition of Activision Blizzard (NASDAQ:ATVI), the gaming giant behind "Call of Duty." The decision follows a failed appeal on May 7 to block the deal, which was completed in 2023. FTC Chairman Andrew Ferguson cited a shift in priorities, aligning with President Donald Trump’s agenda and reallocating agency resources toward cases deemed more relevant, such as a new probe into alleged advertiser collusion on X (formerly Twitter).

The agency also dropped a separate price discrimination case against PepsiCo (NASDAQ:PEP) for allegedly favoring Walmart (NYSE:WMT), marking another rollback of initiatives launched by former FTC Chair Lina Khan. Ferguson's strategic redirection underscores a broader shift in regulatory focus under the current administration.

Microsoft President Brad Smith called the FTC’s decision “a victory for players across the country and for common sense in Washington, D.C.” The FTC initially claimed the Activision deal could harm competition in the gaming industry, particularly for Xbox and Microsoft’s growing cloud and subscription gaming services. However, the agency's inability to secure a court injunction and the completed status of the merger diminished the viability of further legal action.

Although the FTC could have pursued efforts to unwind the merger in a scheduled July trial, the agency ultimately concluded that continuing was not in the public interest. The Microsoft-Activision deal remains the largest-ever acquisition in the video game industry and significantly strengthens Microsoft’s position in the console and cloud gaming markets.