The FTC, which enforces antitrust laws, asked a judge to block the deal in early December, arguing it would give Microsoft’s Xbox exclusive access to Activision’s games and leave Nintendo consoles and Sony’s PlayStation out of the picture.
FTC Attorney James Weingarten said in a brief pre-trial phone hearing that there were no “material” settlement discussions ongoing between the two sides.
Microsoft argues that the deal would benefit gamers and gaming companies, and is offering to sign a legally binding consent decree with the FTC to supply Call of Duty games to competitors including Sony for a decade.
The case reflects the dogged approach of US President Joe Biden’s administration to antitrust enforcement. But antitrust experts say the FTC will face an uphill battle to convince a judge to block the deal, as Microsoft made voluntary concessions to allay fears it could dominate the gaming market.
Michael Chappell, the FTC administrative judge, will rule on the settlement after hearings scheduled for August 2023. Either party can then appeal to the same FTC commissioners who voted on the challenge and then to an American Court of Appeals.
The deal will be scrutinized by the European Union, which has until March 23 to decide whether to allow or block the deal.