A short while ago the Federal Trade Commission lost its legal battle against Microsoft where it attempted to get Microsoft’s acquisition of Activision Blizzard stopped so that it could continue looking into the deal. The FTC attempted to appeal the decision but US District Judge Jacqueline Scott Corley, who presided over the case, promptly rejected the notion.

A report from Reuters indicates that the FTC, mere hours after the appeal was denied, filed an emergency motion to the Ninth Circuit Court of Appeals seeking a “temporary pause” to the deal.

It seems that the basic gist of the FTC’s argument is that it was merely seeking a preliminary injunction so that the FTC had more time to investigate, but Judge Corley applied the standard needed to permanently stop the deal instead. In other words, the FTC believes Corley was treating the case like the FTC wanted to block the deal entirely.

The FTC also stated that Judge Corley had given too much credit to the various deals Microsoft made, such as agreeing to release Call of Duty games on the Switch, and that she “erred” in her view on how the deal would effect subscription services.

The FTC has also found itself under some political pressure regarding its recent losses. On July 13th, the House Judiciary Committee questioned FTC chair Lina Khan. Kevin Kiley asked Khan, “You seem to be losing quite a bit, and I don’t say that to be disrespectful, but these are, after all, taxpayer funds. You are now 0-4 in merger trials. The average win rate for the FTC in the modern antitrust era is around 75 percent. So I have to ask, why are you losing so much?”

Khan’s response didn’t shed much light. She primarily cited successful cases. Riley also asked her about a prior quote where Khan suggested that bringing losing cases to trial could show Congress areas where laws needed to be updated, with Riley even asking if the FTC could be losing deliberately because they don’t have the authority they want.

“The court not only rejected your assertion of a likely anti-competitive effect but found just the opposite,” Kiley said. “The record evidence points to more consumer access. So why should Americans have faith in your judgment when this Biden-appointed judge says you’re so far off the mark?”

Again, Khan didn’t really say much, essentially repeating that the FTC goes to court if it believes some sort of law is being violated.

Riley then criticised the FTC for choosing to use more taxpayer money on an appeal that would be even less likely to succeed.

Microsoft’s deadline to close the Activision Blizzard deal is July 18th. At this point both companies would be free to walk away from the deal but Microsoft would be forced to pay Activision Blizzard a $3 billion reverse termination fee. Its more likely that both companies will simply renegotiate the deal, moving the deadline to some point in the future.

It seems unlikely that Microsoft or Activision Blizzard would want to walk away from the deal now when only the UK remains an obstacle to it going through.