A US judge has now ruled in favor of Microsoft in its Activision Blizzard acquisition, striking against the Federal Trade Commission’s (FTC) attempts to block the merger. After five days of testimony in court, Judge Jacqueline Scott Corley determined that Microsoft can proceed with its nearly $70 billion acquisition.
The win for Microsoft means that the preliminary injunction request from the FTC has been denied.
Judge Corley said in the ruling that, “Microsoft’s acquisition of Activision has been described as the largest in tech history. It deserves scrutiny. That scrutiny has paid off: Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox. It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements to, for the first time, bring Activision’s content to several cloud gaming services.
“…the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.”
The FTC was upset with the decision, with FTC spokesperson Douglas Farrar saying: “We are disappointed in this outcome… In the coming days, we’ll be announcing our next step to continue our fight to preserve competition and protect consumers.”
Of course, Activision and Microsoft were very much not disappointed. Activision CEO Bobby Kotick issued a statement saying, “Our merger will benefit consumers and workers. It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.”
Xbox head Phil Spencer tweeted that he is “grateful to the court for swiftly deciding in [Microsoft’s] favor.”
The Final Hurdle: UK’s CMA
With this decision from Judge Conley, Microsoft is now closer than ever to completing its buyout of Activision Blizzard. The FTC was one of the biggest obstacles in its path, but with the decision, it looks like we may be seeing Microsoft and Activision become one unit after all.
The only thing that is still blocking the merger from completion is the UK’s Competition Markets Authority (CMA). The CMA had blocked the deal over concerns regarding cloud gaming, citing that Microsoft would have an unfair advantage in that sphere.
Microsoft is working towards potentially modifying the acquisition to fit the CMA’s wants. At this point, Microsoft, Activision, and the CMA have agreed on a stay of litigation in the UK. What this means is that the appeal Microsoft filed against the CMA’s decision has been paused as the parties work towards a compromise.
Last month, the CMA and Microsoft went to court in a four day trial. Several documents were revealed during this trial. Court documents show that Xbox has been interested in acquiring several developers to fill content gaps. PlayStation head Jim Ryan admitted that he does not actually find Starfield being an Xbox exclusive “anti-competitive” (which was ironic coming from the head of the console with tons of exclusives).
The deal was also recently approved by the European Commission.
The story of this merger has been very interesting thus far, and it will be interesting to see how it concludes. I predict that it’s nearly guaranteed that Microsoft will complete the merger with Activision Blizzard.
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Zainah Yousef
Zainah Yousef is the author of The Fallen Age Saga and specializes in gaming, social media advice, and reviews. She's been writing all her life and she probably won't stop anytime soon.
