US FTC eyes options after Microsoft/Activision loss

After two court losses last week, the agency’s remaining options are: pursue its fight in the internal FTC court; pursue its parallel case before the appeals court; pursue both; or settle with Microsoft or drop the matter entirely.

The source, who is familiar with the matter, declined to give any other details.

The acquisition could fundamentally reshape the console market by giving Microsoft access to Activision’s programmers, who have pumped out hits like the “Call of Duty,” “Diablo” and “World of Warcraft” series.

U.S. regulators, however, have said it could harm consumers by possibly limiting the reach of Activision’s games.

Microsoft has been fighting for months to save the proposed deal, its biggest acquisition and the largest in the history of the videogame industry, and appears close to finalizing the transaction.

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Microsoft President Brad Smith has referred to the antitrust scrutiny as a “marathon of global regulatory reviews.” On Tuesday, a district court judge in California denied a motion to stop the deal while an internal FTC judge considers it, and on Friday an appeals court denied a motion to pause it.

Meanwhile, Microsoft over the weekend signed a pact to keep “Call of Duty” on Sony’s PlayStation. Sony, which leads the gaming console market, had been one of the deal’s toughest critics.

Experts have said the agreement could make it harder for U.S. regulators to keep fighting.

Still, one option for the FTC would be to reach a settlement with Microsoft and Activision that would allow the agency to point to a success, or it could drop its existing fights even without a settlement.

Or it could keep fighting both in the federal appeals court and in the internal FTC court.

The FTC could also drop the appeal, especially if the deal closes, but proceed with the hearing before the FTC’s judge where any ruling could still face further appeals.

Or it could focus on the federal appeals court and drop the internal FTC process.

Microsoft must also still win UK approval. A tribunal in London on Monday agreed to pause a hearing so that British regulators could consider a modified deal.