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Judge Rules Activision Executives, Including CEO Bobby Kotick, Must Face Lawsuit Over Microsoft Takeover

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A Delaware judge has ruled that Activision Blizzard executives, including longtime CEO Bobby Kotick, must face most of a shareholder lawsuit accusing them of shortchanging investors during the company’s $75.4 billion sale to Microsoft.

In an 83-page decision issued Thursday, Chancellor Kathaleen McCormick of the Delaware Chancery Court said shareholders could move forward with their “core” claim that Kotick and other board members breached their fiduciary duties by prioritizing personal and managerial interests over those of shareholders.

The case, led by the Swedish pension fund Sjunde AP-Fonden, alleges that Kotick rushed into the deal to secure his position and an estimated $400 million in change-of-control benefits, while shielding himself from potential liability related to sexual harassment scandals at Activision. Shareholders further claim that the $95-per-share price undervalued the company—particularly as Activision’s performance improved during the 21-month regulatory approval process before the merger closed in October 2023.

Judge McCormick’s ruling found sufficient grounds to infer that Kotick “manipulated the sale process to favor Microsoft,” which she described as offering “speed, deal certainty, and—inferably—a friendly landing place.” She also found it “reasonably conceivable” that Activision’s directors placed Kotick’s interests above those of investors, potentially allowing a lowball sale while the company’s reputation and stock price were still weighed down by harassment allegations.

However, McCormick dismissed claims against Microsoft, noting there was no evidence the company actively participated in the alleged breaches, even if it may have “passively stood by.” Other secondary claims against Activision officials were also dismissed.

With the decision, McCormick signaled that “litigation on the merits of a trimmed-down version of the plaintiff’s complaint can now launch,” adding pointedly: “Game on.”

The case, Sjunde AP-Fonden v. Activision Blizzard Inc. et al, continues in the Delaware Chancery Court under docket number 2022-1001, marking another chapter in the post-merger fallout surrounding one of the gaming industry’s largest acquisitions.

FTC Drops Microsoft–Activision Blizzard Case, Ending Challenge to $69 Billion Merger

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The U.S. Federal Trade Commission (FTC) has formally dropped its legal case against Microsoft’s $69 billion acquisition of Activision Blizzard, bringing a definitive end to one of the most high-profile antitrust challenges in the gaming industry.

The FTC announced Thursday that it would not pursue further legal action, citing that continuing the case was “not in the public interest.” The decision comes after the agency lost an appeal on May 7 to block the deal, which officially closed in 2023.

The acquisition—the largest in gaming history—gives Microsoft control over blockbuster franchises such as Call of Duty, World of Warcraft, and Candy Crush, solidifying its dominance in both console and cloud-based gaming.

Shifting Priorities Under New FTC Leadership

FTC Chairman Andrew Ferguson, recently appointed by President Donald Trump, is redirecting the agency’s focus toward matters aligned with the current administration’s priorities. This includes:

  • A probe into advertiser collusion on Elon Musk’s X platform (formerly Twitter), as first reported by Reuters.

  • Ending legacy antitrust efforts, including a price discrimination case against PepsiCo, also dropped Thursday.

This pivot marks a departure from the aggressive antitrust posture of Ferguson’s predecessor, Lina Khan, who launched the Activision challenge over concerns that Microsoft might use the acquisition to suppress competition in the gaming sector—particularly via Xbox exclusivity and its Game Pass subscription service.

Microsoft’s Response

In a statement, Microsoft President Brad Smith praised the FTC’s decision, calling it:

“A victory for players across the country and for common sense in Washington, D.C.”

Microsoft has repeatedly argued that the merger will benefit consumers, pledging to keep popular titles like Call of Duty available across platforms, including Sony’s PlayStation.

Background and Legal Outcome

Though the FTC initially failed to secure a preliminary injunction to halt the deal before closing, it retained the option to pursue a post-closing trial in July 2025 aimed at unwinding the acquisition. That option is now off the table.

The deal had already secured regulatory approval in the EU and U.K., the latter after Microsoft agreed to restructure parts of the acquisition, such as cloud gaming rights.

With the FTC now stepping aside, the merger’s legal battles appear fully resolved, cementing Microsoft’s expanded position in the global gaming industry.

Microsoft Wins Appeal Against FTC Challenge to $69 Billion Activision Deal

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Microsoft has secured a major legal victory as the 9th U.S. Circuit Court of Appeals rejected the Federal Trade Commission’s (FTC) bid to revive its antitrust challenge against the tech giant’s $69 billion acquisition of Activision Blizzard, maker of the Call of Duty franchise.

Key Points:

  • Unanimous Ruling: A three-judge panel upheld a lower court decision that denied the FTC’s request for a preliminary injunction. The court found that the FTC failed to demonstrate that the deal would likely harm competition.

  • Deal Closed in 2023: Microsoft finalized the largest-ever gaming acquisition after gaining approvals from regulators including UK authorities, despite scrutiny in multiple global jurisdictions.

  • FTC’s Position: The FTC argued the acquisition would undermine competition in console gaming, subscription services, and cloud gaming, but both the district court and appeals court found these claims lacked sufficient evidence.

  • Impact on FTC Strategy: The ruling is a blow to the FTC’s broader push under President Joe Biden’s administration to ramp up antitrust enforcement in Big Tech. The FTC’s internal administrative proceedings, paused since 2023, remain uncertain.

  • Microsoft’s Next Steps: While Microsoft has not yet commented, the ruling removes a significant legal obstacle and further solidifies its control over Activision’s gaming titles and intellectual property.

Judge Jacqueline Scott Corley had already ruled in 2023 that the acquisition would not “substantially lessen competition,” a standard the appellate court agreed had been correctly applied.