A US court rejected the FTC’s request to suspend Microsoft’s contract with Activision

WASHINGTON, July 13 (Reuters) – A U.S. federal court on Thursday denied a request by the Federal Trade Commission to order Microsoft ( MSFT.O ) to temporarily halt the completion of its $69 billion acquisition of Activision Blizzard ( ATVI ). .o) and show court records.

A federal judge ruled against Microsoft earlier Tuesday, saying the company could not prove the deal was illegal under antitrust laws. The Federal Trade Commission appealed the damages late Wednesday, and Microsoft said it would appeal.

Earlier Thursday, the FTC requested an injunction preventing the deal from being completed, even after the U.S. Circuit Court of Appeals for the Ninth Circuit ruled on a separate stay filed in that court.

If there are any regulatory hurdles, the deal between Microsoft and Activision will likely expire on July 18 without closing the deal. After July 18, both organizations are free to leave, unless they negotiate an extension.

The FTC urged the court to rule on the temporary suspension as soon as possible, noting that the current ban on the deal was scheduled to expire before midnight on Friday.

“We are disappointed that the FTC is pursuing an apparently weak case, and we will resist any attempt to delay its ability to move forward,” Microsoft President Brad Smith said earlier in an emailed statement.

In its request for a temporary stay from Judge Jacqueline Scott Corley, the FTC argued that the denial of the stop-trade ban “raises serious and substantive issues that the appeals court needs to address.”

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

The FTC said it is seeking an order to freeze the transaction until an internal FTC judge rules on it. But Corley instead applied the standard required to permanently terminate the contract, which the agency deemed 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 cutting deals with competitors to protect the proposed deal.

To address the company’s concerns, Microsoft has agreed to license Call of Duty to competitors, including a 10-year deal with Nintendo ( 7974.T ), pending completion of the merger.

The largest deal in the history of the video game industry was also suffered in the UK until this week. After the California ruling, the UK’s competition and markets regulator, which opposed the deal, said a restructured deal between Microsoft and Activision Blizzard could address its concerns, pending a new investigation.

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

(cover) by Diane Bartz and David Shepherdson. Additional reporting by Kanishk Singh; Edited by Tim Ahman, Josie Kao and Jimmy Fried

Our values: Thomson Reuters Trust Policy.