5th Circuit Decision ‘Validates’ Denial of Microsoft/Activision Injunction, Says Microsoft

The 5th U.S. Circuit Appeals Court’s Dec. 15 decision in Illumina v. FTC (docket 23-60167) “validates” U.S. District Judge Jacqueline Scott Corley’s July 11 denial of the FTC’s motion for a preliminary injunction to block Microsoft’s Activision Blizzard buy “in multiple respects,” Microsoft counsel Rakesh Kilaru of Wilkinson Stekloff wrote the 9th Circuit in a letter Wednesday (docket 23-15992). The FTC argues in its appeal of Corley’s denial that precedent in the 9th Circuit entitles the FTC to an injunction under Section 13(b) of the FTC Act if it shows serious questions as to the antitrust merits of the Microsoft/Activision transaction (see 2312070002). The 5th Circuit’s decision in Illumina vacated an FTC order “unwinding a vertical merger through an administrative proceeding,” Kilaru told the 9th Circuit. The 5th Circuit “specifically endorsed Judge Corley’s approach to addressing post-merger solutions to alleged competitive concerns, squarely rejecting the FTC’s arguments in this appeal,” he said. The Illumina decision also rejected the FTC’s argument that post-merger agreements are relevant only if they entirely neutralize and undo any lessening of competition, he said. Again citing Corley’s opinion, Illumina deemed this argument “irreconcilable” with Section 7 of the Clayton Act, finding instead that a post-merger agreement need only sufficiently mitigate the merger’s effect such that it’s no longer likely to substantially lessen competition, he said.