UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS: Lina M. Khan, Commissioner 

Rebecca Kelly Slaughter

Alvaro M. Bedoya 

In the Matter of

Microsoft Corp., 

a corporation, 

and 

Activision Blizzard, Inc., 

a corporation. 

Docket No. 9412 

RESPONDENTS’ MOTION TO WITHDRAW THIS 

PROCEEDING FROM ADJUDICATION

Respondents Microsoft Corp. (“Microsoft”) and Activision Blizzard, Inc. (“Activision”) 

jointly move to withdraw this proceeding from adjudication in light of the district court’s denial 

of the FTC’s request for a preliminary injunction under Section 13(b), and the court of appeals’ 

denial of the FTC’s motion for an injunction pending appeal. See Preliminary Injunction Opinion 

(Dkt. 305), FTC v. Microsoft Corp., No. 3:23-cv-02880 (N.D. Cal.) (hereinafter “PI Order”); 

Order (Dkt. 25), FTC v. Microsoft Corp., No. 23-15992 (9th Cir.). FTC Rule 3.26 establishes

“two procedures by which respondents may obtain consideration of whether continuation of an 

adjudicative proceeding is in the public interest after a court has denied preliminary injunctive 

relief in a separate proceeding brought under section 13(b) of the Federal Trade Commission 

Act.” 16 C.F.R. § 3.26(a). Respondents rely on the first of those procedures—a motion to 

withdraw the proceeding from adjudication to allow the Commission “to consider whether the 

public interest warrants further litigation.” 16 C.F.R. § 3.26(c). 

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Withdrawal would advance the public interest and the core purpose of Rule 3.26(c). After

a five-day evidentiary hearing, the district court found that the FTC is unlikely to succeed on any 

of the theories of competitive harm advanced in its Complaint for multiple, independently 

sufficient reasons. In addition, in the wake of the district court’s findings and the court of 

appeals’ denial of injunctive relief pending appeal, Microsoft signed a 10-year, binding 

agreement with Sony, the principal complainant against the transaction, to keep Call of Duty on 

PlayStation following the acquisition of Activision Blizzard. Under these circumstances, 

withdrawal from adjudication is not only mandated by regulation, but would enable the 

Commission to make a reasoned determination whether to proceed without the ordinary 

adjudicative constraints of Part 3, including the ban on ex parte communications between the 

Commission and Complaint or Respondents’ Counsel. 

BACKGROUND

This matter concerns the FTC’s challenge of Microsoft’s proposed acquisition of 

Activision. On December 8, 2022, the FTC initiated an administrative proceeding before its

Administrative Law Judge (ALJ) seeking to block the transaction. An evidentiary hearing is 

currently scheduled to commence on August 2, 2023, before the ALJ. 

On June 12, 2023, the FTC filed a Complaint for a Temporary Restraining Order (TRO) 

and Preliminary Injunction in the United States District Court for the Northern District of 

California pursuant to Section 13(b) of the Federal Trade Commission Act, seeking to enjoin the 

transaction pending the completion of that administrative proceeding. The district court granted 

the request for a TRO, enjoining Microsoft and Activision from closing their merger until the 

fifth business day after the court’s ruling on the FTC’s request for a preliminary injunction. The 

district court then held a five-day evidentiary hearing from June 22 to 29, 2023. 

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 On July 10, 2023, the district court denied the FTC’s request for a preliminary injunction 

in a carefully reasoned 53-page decision. See PI Order. The court further modified its TRO to 

dissolve at 11:59 p.m. on July 14, 2023, unless the FTC obtained a stay pending appeal from the 

Ninth Circuit Court of Appeals. Id. at 53. 

On July 12, 2023, the Commission noticed an appeal of the district court’s decision. See 

Notice of Appeal (Dkt. 307), FTC v. Microsoft Corp., No. 3:23-cv-02880 (N.D. Cal.). On July 

13, 2023, the Commission filed emergency motions in both the district court and the court of 

appeals seeking a stay of the district court’s decision pending appeal and requesting a decision

before the expiration of the district court’s TRO. See id., Motion for Injunction Pending Appeal 

(Dkt. 313); Motion for Injunction Pending Appeal (Dkt. 21), FTC v. Microsoft Corp., No. 23-

15992 (9th Cir.). That same day, the district court summarily denied relief. See Order Denying 

Motion for Injunction Pending Appeal (Dkt. 317), FTC v. Microsoft Corp., No. 3:23-cv-02880 

(N.D. Cal.). The Ninth Circuit swiftly followed suit. See Order (Dkt. 25), FTC v. Microsoft 

Corp., No. 23-15992 (July 14, 2023). 

On July 16, 2023, Microsoft publicly announced that it had signed a binding agreement to 

keep Call of Duty on PlayStation following the transaction.1

 

ARGUMENT

The plain language of the FTC’s Rules of Practice for Adjudicative Proceedings compels 

withdrawal of this matter from adjudication as a matter of course. Rule 3.26(b) permits the filing 

of a motion to withdraw an administrative proceeding from adjudication when “[a] court of 

1

 Phil Spencer (@XboxP3), Twitter (Jul. 16, 2023, 10:03 AM), https://twitter.com/XboxP3/

status/1680578783718383616 (“We are pleased to announce that Microsoft and @PlayStation 

have signed a binding agreement to keep Call of Duty on PlayStation following the acquisition 

of Activision Blizzard. We look forward to a future where players globally have more choice to 

play their favorite games.”). 

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appeals has denied a Commission motion for relief pending appeal” following a district court’s 

denial of the Commission’s request for a preliminary injunction. 16 C.F.R. § 3.26(b)(2). Such a 

motion must be filed within 14 days of the denial of the Commission’s request for relief pending 

appeal. Id. Assuming the motion is timely filed, “[t]he Secretary shall issue an order 

withdrawing the matter from adjudication 2 days after such a motion is filed.” 16 C.F.R. 

§ 3.26(c) (emphasis added). 

The conditions for withdrawing this matter from adjudication are satisfied here. The 

district court has denied the FTC’s request for a preliminary injunction. The court of appeals has 

denied the FTC’s motion for relief pending appeal. Respondents are filing a timely motion to 

withdraw from adjudication under Rule 3.26(b). Because the grounds for withdrawal under Rule 

3.26(c) are met, “the Secretary shall issue an order withdrawing the matter from adjudication [in] 

2 days”—on Thursday, July 20, 2023. 16 C.F.R. § 3.26(c) (emphasis added). 

Withdrawal from adjudication is not only mandatory but is in the public interest. The 

district court had a full opportunity to consider the FTC’s claims and found that the Commission 

was unlikely to succeed on the merits of those claims for multiple, independently sufficient 

reasons. The evidence considered by the district court was robust: All the FTC’s major 

witnesses—including the CEOs of Microsoft, Xbox, Activision, and Sony— testified at the 

hearing. The court also heard from the CFOs of Microsoft and Xbox, all of the economic experts, 

and all of the third parties the FTC subpoenaed to testify in the administrative proceeding. The 

FTC submitted a total of 851 exhibits to the district court, including evidence not directly raised 

during the hearing. Finally, the court considered “voluminous pre-and-post hearing writ[ten]

submissions” before reaching its decision. PI Order at 1. 

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In light of this thorough airing and the district court’s findings that the FTC failed to raise 

any serious questions regarding the legality of the merger, there is little reason to believe the ALJ 

would reach a different conclusion. Any justification for continuing the case is further 

undermined by the fact that Sony—the principal complainant against the deal—has now signed a 

10-year, binding agreement with Microsoft to keep Call of Duty on the PlayStation. 

Indeed, the Commission has not proceeded with a Part 3 trial following a district court 

denial of a motion for a preliminary injunction in more than three decades, and it has never done 

so in connection with a vertical merger challenge. Rather, the Commission’s consistent practice 

following denial of a preliminary injunction has been to withdraw the matter from adjudication 

upon request and then, after a reasoned consideration of the district court ruling, return the matter 

to adjudication for the sole purpose of dismissing the case. See, e.g., Meta Platforms, Inc., No. 

9411, 2023 WL 2328125 (FTC Feb. 24, 2023); Thomas Jefferson Univ., No. 9392, 2021 WL 

1143383 (FTC Mar. 15, 2021); RAG-Stiftung, No. 9384, 2020 WL 2197925 (Apr. 29, 2020). 

That is what should happen here. 

CONCLUSION

 For the reasons stated above, Respondents respectfully request that the Commission grant 

their motion for withdrawal of this matter from adjudication in order to consider whether the 

public interest warrants further litigation. 

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Dated: July 18, 2023 Respectfully submitted,

By: /s/ Steve C. Sunshine By: /s/ Beth Wilkinson

Steven C. Sunshine 

Julia K. York 

Skadden, Arps, Slate, Meagher & Flom LLP 

1440 New York Avenue, N.W. 

Washington, DC 20005 

Telephone: (202) 371-7860 

Fax: (202) 661-9126 

steve.sunshine@skadden.com 

julia.york@skadden.com 

Maria A. Raptis

Michael J. Sheerin

Evan R. Kreiner 

Skadden, Arps, Slate, Meagher & Flom LLP 

One Manhattan West

New York, NY 10001 

Telephone: (212) 735-2425 

Fax: (917) 777-2425 

maria.raptis@skadden.com 

michael.sheerin@skadden.com 

evan.kreiner@skadden.com 

Counsel for Activision Blizzard, Inc. 

Beth Wilkinson 

Rakesh N. Kilaru

Kieran Gostin

Grace L. Hill

Anastasia M. Pastan

Sarah E. Neuman

Alysha Bohanon 

Wilkinson Stekloff LLP 

2001 M Street NW, 10th Floor 

Washington, DC 20036 

Telephone: (202) 847-4000 

Fax: (202) 847-4005 

bwilkinson@wilkinsonstekloff.com 

rkilaru@wilkinsonstekloff.com 

kgostin@wilkinsonstekloff.com 

ghill@wilkinsonstekloff.com 

apastan@wilkinsonstekloff.com 

sneuman@wilkinsonstekloff.com 

abohanon@wilkinsonstekloff.com 

Michael Moiseyev

Megan A. Granger 

Weil Gotshal & Manges LLP

2001 M Street NW 

Suite 600 

Washington, DC 20036 

(202) 682-7026 

michael.moiseyev@weil.com

megan.granger@weil.com

 Counsel for Microsoft Corp. 

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CERTIFICATE OF SERVICE

I hereby certify that on July 18, 2023, I caused a true and correct copy of the foregoing 

to be filed electronically using the FTC’s E-Filing System and served the following via email:

April Tabor 

Secretary

Federal Trade Commission

600 Pennsylvania Ave., NW, Rm H-113 

Washington, DC 20580 

ElectronicFilings@ftc.gov 

The Honorable D. Michael Chappell 

Administrative Law Judge

Federal Trade Commission

600 Pennsylvania Ave., NW, Rm H-110 

Washington, DC 20580 

I also certify that I caused the forgoing document to be served via email to: 

James H. Weingarten (jweingarten@ftc.gov) 

James Abell (jabell@ftc.gov) 

Cem Akleman (cakleman@ftc.gov) 

J. Alexander Ansaldo (jansaldo@ftc.gov) 

Peggy Bayer Femenella (pbayerfemenella@ftc.gov)

Michael T. Blevins (mblevins@ftc.gov) 

Amanda L. Butler (abutler2@ftc.gov) 

Nicole Callan (ncallan@ftc.gov) 

Maria Cirincione (mcirincione@ftc.gov) 

Kassandra DiPietro (kdipietro@ftc.gov) 

Jennifer Fleury (jfleury@ftc.gov) 

Michael A. Franchak (mfranchak@ftc.gov)

James Gossmann (jgossmann@ftc.gov) 

Ethan Gurwitz (egurwitz@ftc.gov) 

Meredith Levert (mlevert@ftc.gov) 

David E. Morris (dmorris1@ftc.gov) 

Merrick Pastore (mpastore@ftc.gov) 

Stephen Santulli (ssantulli@ftc.gov) 

Edmund Saw (esaw@ftc.gov) 

U.S. Federal Trade Commission 

600 Pennsylvania Ave., N.W. 

Washington, DC 20580 

Telephone: (202) 326-3570 

Counsel Supporting the Complaint

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/s/ Beth Wilkinson

Beth Wilkinson 

Counsel for Microsoft Corp. 

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