In a blow to the Federal Trade Commission (FTC), the court rejected the agency’s final effort to prevent Microsoft from acquiring Activision Blizzard. This decision marks the FTC’s second setback, following the denial of its preliminary injunction request earlier this week. The injunction sought to block Microsoft’s acquisition until the conclusion of a separate FTC administrative case.

The FTC swiftly appealed the ruling by Judge Jacqueline Scott Corley, but the Ninth Circuit Court of Appeals has now denied the agency’s request for emergency relief. Consequently, Microsoft is now poised to finalize its purchase of Activision Blizzard as the temporary restraining order, issued as part of Judge Corley’s order, expires at 11:59 PM PT yesterday [July 14th, 2023].

Microsoft’s Vice Chair and President, Brad Smith, expressed the company’s satisfaction with the Ninth Circuit’s decision, stating, “We appreciate the Ninth Circuit’s swift response denying the FTC’s motion to further delay the deal. This brings us another step closer to the finish line in this marathon of global regulatory reviews,” in a statement.

Although Microsoft is on the verge of closing the deal, a significant hurdle remains in the United Kingdom. The UK’s Competition and Markets Authority (CMA) previously blocked Microsoft’s acquisition, citing concerns over competition in the nascent cloud gaming market. However, both Microsoft and the CMA have agreed to temporarily pause their legal battles to explore potential modifications to the transaction that could address the CMA’s apprehensions regarding cloud gaming.

In a recent development, the CMA warned that Microsoft’s proposed modifications may trigger a new merger investigation. The regulator revealed that discussions with Microsoft are in the early stages, and it has extended the timeline for its overall investigation into the deal from July 18th to August 29th.

Interestingly, Bloomberg reported that Microsoft is contemplating the sale of UK cloud gaming rights to a telecommunications, gaming, or internet company. This potential move aims to facilitate the completion of the Activision deal in the UK, appeasing the concerns raised by the CMA.

As Microsoft nears the completion of its acquisition of Activision Blizzard, the outcome of the UK regulatory battle will undoubtedly shape the final contours of the deal. In the meantime, all eyes are on the negotiations between Microsoft and the CMA, as stakeholders eagerly await a resolution to pave the way for this transformative acquisition in the gaming industry.