California Judge Allows Microsoft’s Acquisition of Activision Blizzard to Proceed
After five days of intense testimony, a California judge has ruled in favor of Microsoft, allowing the tech giant to proceed with its acquisition of gaming company Activision Blizzard. The decision comes amidst an ongoing antitrust case brought by the Federal Trade Commission (FTC), but Judge Jacqueline Scott Corley has decided to deny the regulator’s request for a preliminary injunction.
Describing Microsoft’s acquisition as the largest in tech history, Judge Corley acknowledged the need for scrutiny but ultimately concluded that the FTC has not demonstrated a likelihood of prevailing in its claim that the merger would substantially lessen competition. She pointed to Microsoft’s commitments to continue releasing popular game franchise “Call of Duty” on PlayStation and even extend it to Nintendo Switch, as well as agreements to bring Activision’s content to various cloud gaming services, as evidence of increased consumer access.
Microsoft President Brad Smith expressed gratitude for the court’s decision and hope for a timely resolution in other jurisdictions. Activision Blizzard CEO Bobby Kotick also welcomed the ruling, stating that the merger will benefit consumers and workers by enabling competition.
The FTC, however, expressed disappointment in the outcome and vowed to continue its fight to preserve competition and protect consumers. The judge’s ruling gives Microsoft the green light to close the deal before the July 18th deadline, as long as it either concludes the transaction outside of the UK or negotiates a remedy with the UK Competition and Markets Authority (CMA). The UK regulator had initially blocked the acquisition in April, and Microsoft is currently appealing that decision.
European regulators have already approved the deal, adding another layer of complexity to the situation. It is likely that Microsoft and Activision Blizzard will extend their merger agreement to cover the CMA appeal process. The FTC has until July 14th to appeal Judge Corley’s decision, but it remains to be seen whether they will pursue further action.
If the court order stands, it would mark a significant loss for FTC Chair Lina Khan, who has been targeting large tech companies since taking office in 2021.