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Following a five-day court case in San Francisco, California, between Microsoft and the Federal Trade Commission (FTC), The presiding Judge has ruled in favor of Microsoft and denied the FTC’s request for a preliminary injunction.
Today Judge Jacqueline Scott Corley has concluded the case by submitting the following statement saying that the Microsoft acquisition of Activision-Blizzard will not lessen competition, against the claims of the FTC:
“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. This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action. For the reasons explained, the Court finds 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. The motion for a preliminary injunction is therefore DENIED”.
This ruling means that Microsoft can close the deal to acquire Activision-Blizzard just ahead of the July 18th deadline however they will still need to resolve the acquisition block in the UK from the Competition and Markets Authority (CMA). It seems however Microsoft is making moves to do so as they have announced they will pause their appeal process and attempt to “modify” the transaction so it will be more “acceptable” by the UK regulators.
Responding to the news, Microsoft President Brad Smith has made a Twitter post saying that grateful to the court for the quick decision and that they are committed to addressing any further regulatory concerns.
Our statement on today’s decision: pic.twitter.com/jRDD8PhBeT
— Brad Smith (@BradSmi) July 11, 2023
Head of Xbox Phil Spencer, who acted as a witness in the court proceedings has also left a Twitter post, likewise saying that he was grateful to the court for the swift ruling and that the acquisition will be good for the industry.
1/We’re grateful to the court for swiftly deciding in our favor. The evidence showed the Activision Blizzard deal is good for the industry and the FTC’s claims about console switching, multi-game subscription services, and cloud don’t reflect the realities of the gaming market.
— Phil Spencer (@XboxP3) July 11, 2023
As for the FTC, spokesperson Douglas Farrar has made a statement that the FTC is still planning its next move. “We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles. In the coming days, we’ll be announcing our next step to continue our fight to preserve competition and protect consumers”. It is possible that the FTC could attempt to appeal the case however nothing has been confirmed so far.
