Microsoft has successfully defended its $69 billion acquisition of Activision Blizzard, as a U.S. federal appeals court dismissed the Federal Trade Commission’s (FTC) legal challenge against the blockbuster deal.

The 9th U.S. Circuit Court of Appeals, based in San Francisco, ruled in favor of Microsoft by upholding a lower court decision that had previously denied the FTC’s request for a preliminary injunction. This decision effectively shuts down a key legal roadblock and reinforces the legitimacy of the acquisition, which was finalized in 2023.

The FTC had argued that Microsoft’s takeover of Activision Blizzard—publisher of major gaming franchises like Call of Duty, World of Warcraft, and Overwatch—could stifle competition in the gaming industry. However, the courts found insufficient grounds to halt or reverse the merger, solidifying Microsoft’s growing dominance in the gaming sector.

The acquisition represents one of the largest in tech and gaming history and significantly boosts Microsoft’s presence in the interactive entertainment market. With Activision Blizzard now officially part of Microsoft, the tech giant continues its strategy to expand Xbox Game Studios and its cloud gaming footprint.

This legal victory also marks a setback for U.S. regulators, who have faced challenges in blocking high-profile mergers in the tech space.