In a significant development, Microsoft's proposed acquisition of Activision Blizzard has overcome a major obstacle. A judge has dismissed the Federal Trade Commission's (FTC) request for a preliminary injunction to halt the $68.7 billion deal. The ruling paves the way for Microsoft to proceed with the acquisition, which has been under scrutiny since its announcement in January 2023.
The FTC had raised antitrust concerns, arguing that the merger could potentially harm consumers. The commission's case hinged on the possibility of Microsoft making franchises like Call of Duty exclusive to Xbox platforms. However, Microsoft successfully argued that it had no such intentions, citing its commitment to keep Call of Duty on PlayStation for 10 years and bring the series to Nintendo platforms.
Judge Jacqueline Scott Corley, who presided over the case, ruled in favor of Microsoft. In her ruling, she stated, "The FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content."
Microsoft President Brad Smith expressed gratitude for the court's decision, stating, "As we've demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns."
Despite this victory, Microsoft's path to acquiring Activision Blizzard isn't entirely clear. The company still faces regulatory scrutiny in the United Kingdom, where the Competition and Markets Authority has raised concerns over cloud gaming.
The FTC's administrative trial is still pending, and the UK antitrust authority presents a significant roadblock. However, the companies have cleared a major hurdle by winning this particular battle. The FTC has until 11:59 PM PT on July 14th to obtain a stay pending appeal from the Ninth Circuit Court of Appeals to further delay the deal from closing.
Microsoft and Activision Blizzard are optimistic that the ruling signals a path to full regulatory approval elsewhere around the globe. They stand ready to work with UK regulators to address any remaining concerns so their merger can quickly close.
The proposed merger, described as the largest in tech history, has been a subject of intense scrutiny. However, this ruling is a significant step forward, potentially setting a precedent for future tech mergers and acquisitions.
