Microsoft-Activision Deal: FTC Agrees To Pause Trial, Opening Door For Settlement Talks

The U.S. Federal Trade Commission (F.T.C.) agreed to pause its in-house trial against the $69 billion acquisition of Activision Blizzard Inc. ATVI by Microsoft Corp. MSFT.

What Happened: The decision marks a significant victory for Microsoft and Activision as they strive to finalize the largest-ever gaming deal amidst regulatory hurdles in the U.S. and the U.K., Bloomberg reports.

The companies had requested the F.T.C. to withdraw the case, which was due for trial in August. The F.T.C. is expected to issue an order later, following their request after losing a federal court bid to prevent the companies from merging.

Once the case is withdrawn, Microsoft and Activision can attempt to convince the F.T.C.’s commissioners to accept a settlement or drop their opposition to the deal. The F.T.C. is currently appealing a federal court ruling in favor of the deal, although the appeals court declined to halt the merger while the appeal is in progress.

On Wednesday, the companies extended their merger agreement to Oct. 18 to allow themselves more time for negotiations with the U.K. Competition and Markets Authority, which had vetoed the merger in April. While the competition enforcer is concerned over the acquisition’s impact on the cloud gaming market, it has agreed to give Microsoft a second chance to offer a remedy.

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Why It Matters: The F.T.C.’s decision to pause the trial comes amid a broader debate about the impact of the merger on the gaming industry. Recently, 22 Republican members of the U.S. House of Representatives urged the F.T.C. to abandon its antitrust case against Microsoft, arguing that the deal promises to expand consumer choices.

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