Microsoft-Activision deal moves closer as judge denies FTC injunction

A federal judge in San Francisco denied the Federal Trade Commission’s request for a preliminary injunction to prevent Microsoft from completing the acquisition of video game publisher Activision Blizzard.

However, the deal is not entirely clear cut. The FTC can now take its appeal of the decision to the Federal Court of Appeal, and the two companies must find a way forward to resolve the opposition from the UK’s Competition and Markets Authority.

“This court’s responsibility in this case is narrow. It is to decide, despite these current circumstances, whether the merger should be halted—perhaps even terminated—pending a decision by the Administrative Federal Trade Commission,” Judge Jacqueline Scott Corley wrote in her essay. her decision, posted on Tuesday. For the reasons described, the court found that the FTC did not show the likelihood that it would prevail in its claim that this particular vertical merger in this specific industry might substantially reduce competition. Conversely, the standard evidence points to consumer access to the Call of assignment and other Activision content. Thus, the request for a preliminary injunction is denied.”

Shares of Activision Blizzard reached an intra-session high of $88.03 a share after the US District Court for the Northern District of California issued the decision. Microsoft agreed to buy the game publisher for $95 per share.

“The merger will benefit consumers and operators. It will enable competition rather than allow established market leaders to continue to dominate our fast-growing industry,” Activision Blizzard CEO Bobby Kotick said in a statement.

Microsoft also praised the decision.

“We are grateful to the court in San Francisco for this swift and comprehensive decision and hope that other jurisdictions will continue to work toward a timely resolution,” Microsoft President and Vice President Brad Smith said in a statement. “As we have consistently made clear throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”

The decision comes after five days of court hearings to assess whether Microsoft He will be able to complete $68.7 billion Activision Blizzard Acquisition announced in 2022. Judge It was deciding whether to grant the Federal Trade Commission’s request for an emergency injunction to prevent the deal from closing.

The FTC argued that Microsoft had shown interest in making certain games exclusive, to prevent them from appearing on Sony’s PlayStation or Nintendo Switch, and that it might do so if the deal closed. But Microsoft said the company wants to make Activision titles more widely available, rather than grow in part from people subscribing to its Game Pass game library. Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick both testified, as did executives from Alphabet, Nvidia and Sony.

In December, the FTC filed suit to block the deal and ask an administrative law judge at the agency to evaluate it. But in June, before that could happen, the FTC sought a preliminary injunction to block Microsoft from completing the acquisition, with an eye to referring the case to an administrative law judge on August 2. July 18th.

“We are disappointed with this outcome given the clear threat this merger poses to open up competition in cloud gaming, subscription services, and consoles. In the coming days we will announce our next steps to continue our fight to maintain competition and protect consumers,” said an FTC spokesperson.

Kotick said during the hearings that Activision Blizzard’s board of directors did not see how the deal could proceed if the judge approved the initial injunction.

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