The U.S. Federal Trade Commission (FTC) has officially ended its legal efforts to block Microsoft’s $69 billion acquisition of video game giant Activision Blizzard, bringing one of the tech industry's most closely watched antitrust cases to a conclusion.

The FTC on Tuesday filed a notice with the U.S. Court of Appeals for the Ninth Circuit, withdrawing its appeal against a federal judge’s ruling that allowed the deal to proceed. This decision follows a months-long legal battle that began in December 2022, when the FTC first sued to stop the merger, citing concerns that the acquisition could harm competition in the gaming industry.

The commission’s move effectively clears the final significant regulatory hurdle for Microsoft, after the deal had already been approved by regulatory authorities in the European Union, China, and the United Kingdom. Microsoft completed the acquisition in October 2023 following a favorable ruling from U.S. District Judge Jacqueline Scott Corley, who found insufficient evidence that the merger would substantially reduce competition or harm consumers.

A Landmark Deal in Gaming

Microsoft’s acquisition of Activision Blizzard, the publisher behind major franchises such as Call of Duty, World of Warcraft, and Candy Crush, is one of the largest in tech history and easily the biggest in the gaming sector. The deal is a cornerstone of Microsoft’s strategy to expand its presence in the gaming market, particularly in the realm of cloud gaming and subscription services through its Xbox Game Pass platform.

The FTC argued that the deal could give Microsoft an unfair advantage by potentially making popular Activision titles exclusive to its platforms, thereby undermining competition from rivals such as Sony and Nintendo. However, Microsoft repeatedly pledged to maintain access to Call of Duty and other key games on competing consoles for at least ten years, helping to allay concerns from some regulators.

Political and Market Implications

The FTC's decision to drop its appeal signals a significant shift in the agency’s posture toward big tech mergers under Chair Lina Khan’s leadership. While the FTC under Khan has pursued an aggressive antitrust agenda, the loss in court highlighted the legal limits of that approach.

In a statement, a Microsoft spokesperson welcomed the FTC’s decision, calling it “a step forward for gamers and the industry.” The company reiterated its commitment to promoting consumer choice and competition, particularly in the rapidly evolving areas of mobile and cloud gaming.

Activision Blizzard also issued a statement expressing confidence in the future under Microsoft’s leadership, emphasizing that the merger would foster innovation and benefit players worldwide.

What Comes Next?

With regulatory obstacles now behind them, Microsoft and Activision Blizzard are focusing on integrating operations. Industry analysts expect the merger to accelerate Microsoft’s push into game streaming and mobile gaming, positioning it as a major challenger to Apple and Google in app distribution and monetization.

Meanwhile, the FTC's withdrawal raises questions about how the agency will approach future tech deals. Some critics have urged the FTC to be more selective in the cases it brings, focusing on mergers that present more clear-cut anticompetitive risks.

For now, the gaming landscape has changed dramatically — with Microsoft poised to become an even more dominant force in one of the world’s most lucrative entertainment markets.