FTC drops case over Microsoft's $69 billion Activision Blizzard deal

By Jody Godoy

(Reuters) - The U.S. Federal Trade Commission dropped a case that sought to block Microsoft's $69 billion purchase of "Call of Duty" maker Activision Blizzard, saying on Thursday that pursuing the case against the long-closed deal was not in the public interest.

FTC Chairman Andrew Ferguson is seeking to use the agency's resources for cases that fit with President Donald Trump's agenda, such as a probe related to whether advertisers colluded to spend less on X first reported by Reuters on Thursday.

Ferguson is beginning to shut down some efforts started by his predecessor Lina Khan, including dropping a case on Thursday that had accused PepsiCo of price discrimination that favored Walmart.

The FTC lost an appeal on May 7 seeking to reverse a judge's decision declining to block the Microsoft-Activision deal, which closed in 2023.

Microsoft President Brad Smith said on Thursday that the FTC's decision to drop the case was "a victory for players across the country and for common sense in Washington, D.C."

When challenging a new merger, the FTC typically asks a judge to temporarily block the deal to give the agency time to challenge it in its own administrative court. But deals that are temporarily blocked are often abandoned.

Though the FTC lost its case seeking to block the deal temporarily, the agency could have sought to unwind the acquisition at a trial that was scheduled for July.

The Activision Blizzard transaction marked the largest-ever acquisition in the video gaming market. The FTC claimed the tie-up would allow Microsoft to fend off competitors to the Xbox console and to its subscription and cloud-based gaming business.

(Reporting by Jody Godoy in New York and Mike Scarcella in Washington; Editing by Rod Nickel and Jamie Freed)