A federal judge in San Francisco has ruled against the Federal Trade Commission and its motion for a preliminary injunction to prevent Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard. This will allow Microsoft to close the deal, provided it is willing to do so with a workaround in the United Kingdom or come to an agreement with its Competition and Markets Authority, which moved to block the acquisition in April. Microsoft filed an appeal, and a hearing is set to begin on July 28, but the acquisition deal has a July 18 termination date, after which Microsoft would have to pay Activision Blizzard a $3 billion termination fee.
Judge Jacqueline Scott Corley’s decision concluded: “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.”
While the FTC can appeal the decision, it is unclear whether it plans to do so.
Microsoft Gaming CEO Phil Spencer said, “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. Since we first announced this deal, our commitment to bringing more games to more people on more devices has only grown. We’ve signed multiple agreements to make Activision Blizzard’s games, Xbox first party games and Game Pass all available to more players than they are today. We know that players around the world have been watching this case closely and I’m proud of our efforts to expand player access and choice throughout this journey.”
