Microsoft Clears Final Legal Obstacle in Activision Merger As FTC Drops Case: Retail Stays Optimistic

Microsoft Corp.(MSFT) has cleared a major legal hurdle in its high-profile pursuit of Activision Blizzard Inc. (ATVI) acquisition, as a federal appeals court backed a lower court's decision not to block the merger. 

This development effectively ends the Federal Trade Commission's (FTC) legal battle against the deal, marking a massive shift in the regulatory terms for Big Tech acquisitions.

The Ninth Circuit Court of Appeals on May 7, 2025, upheld the United States District Court ruling for the Northern District of California.

That original decision denied the FTC’s attempt to obtain a preliminary injunction to stop Microsoft’s acquisition of the gaming giant. 

The FTC has formally dropped its internal case against the merger, determining that continued litigation no longer aligns with public interest.

After months of legal back-and-forth, this ruling marks a definitive conclusion to the FTC’s opposition to one of the largest gaming industry deals. 

The commission’s decision to dismiss the case signals an acknowledgment that further pursuit would not likely alter the outcome.

The $69 billion acquisition, announced in early 2022, faced intense scrutiny from regulators in both the U.S. and abroad over concerns it could suppress competition in the gaming and cloud services markets. 

Activision Blizzard is a gaming company known for titles such as Call of Duty, World of Warcraft, Diablo, and Overwatch.

The merger is expected to position Microsoft to strengthen its Xbox ecosystem, expand its Game Pass offerings, and compete more aggressively in the mobile and cloud gaming markets.

On Stocktwits, retail sentiment around Microsoft remained in ‘bullish’ territory.

Microsoft stock has gained 6.9% in 2025 and 5.5% in the last 12 months.

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