After several weeks in a court case between Microsoft and the Federal Trade Commission over the proposed acquisition of Activision Blizzard for $68.7 billion, a California judge, Judge Jacqueline Scott Corley, has now officially denied the Federal Trade Commission’s motion for a preliminary injunction to prevent the acquisition. This allows Microsoft to finally close the deal in the US if the FTC does not move to file an appeal on the judge’s decision and if it wishes to finalize the deal outside the United Kingdom or move to make an agreement with the United Kingdom’s Competition and Markets Authority (CMA). The CMA blocked the proposal back in April, but Microsoft filed an appeal with a hearing expected to hold on July 28.
Our statement on today's decision: pic.twitter.com/jRDD8PhBeT
— Brad Smith (@BradSmi) July 11, 2023
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
Judge Corley’s statement regarding their decision:
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.
FTC spokesperson Douglas Farrar commented on the FTC’s 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,”
Activision Blizzard CEO Bobby Kotick commented on the announcement, saying:
Activision Blizzard has also reacted to the decision. “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.”
Microsoft Gaming CEO Phil Spencer:
“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.