California Judge, Jacqueline Scott Corley, is allowing Microsoft to acquire Activision Blizzard after days of listening to several testimonies from both FTC and Microsoft. It was then decided that the regulator's request for a preliminary injunction to be denied. Microsoft wins Activision Blizzard acquisition details below.
Microsoft to Proceed with Activision Blizzard Acquisition
Judge Corley may be seen to be siding with Microsoft on its commitment to keep Call of Duty on PlayStation and considering that it can even be available for crossplay to Nintendo Switch. The court ruling also agrees with Microsoft in theory about Nintendo Switch being a part of the console market but also sees and accepts the FTC claim that it can reasonably claim that it's not.
With the ruling submitted today, Judge Corley has mentioned “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.”
With the statement being released today, Microsoft President Brad Smith shares through Twitter: “We're grateful to the Court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution. As we've demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”
Our statement on today's decision: pic.twitter.com/jRDD8PhBeT
— Brad Smith (@BradSmi) July 11, 2023
Xbox Head Phil Spencer, who is a key witness in the trial, also shared that “We're grateful to the court for swiftly deciding in our favor. The evidence showed that 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.”
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
With this ruling, Microsoft is allowed to close its Activision Blizzard deal ahead of the July 18th deadline as long as the company is willing to close around the UK or if the Competition Markets Authority (CMA) would be willing to negotiate a remedy. The UK regulator moved to block the acquisition proposal set by Microsoft in April. While this is all happening, Microsoft is already appealing the decision with a hearing that is set to begin on July 28th. Back in May, the European regulators gave the thumbs up to proceed si Microsoft can close without the UK as well as not having the injunction in the US that's preventing it to happen.
The FTC still has a chance to appeal the ruling made by Judge Corley before July 14 but since the regulator didn't appeal a court's decision permitting Meta to acquire Within, it may abandon the case against Microsoft and Activision Blizzard instead. FTC is looking at its second major loss if the court order stands with Chair Lina Khan in the lead.
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