In a landmark case for the tech industry, a California federal judge has given Microsoft the green light to acquire Activision Blizzard. Microsoft has won the fight against the Federal Trade Commission in a court case that could have halted the biggest acquisition in tech history. The ruling clears the way for Microsoft’s proposed $69 billion acquisition of the renowned gaming company, but only in the U.S. The UK’s Competition and Markets Authority still poses a hurdle.
In a pivotal decision handed down on Tuesday, Judge Jacqueline Scott Corley ruled against the FTC’s preliminary injunction. The FTC had called for a delay of the merger until its in-house court had determined if the merger would lead to a less competitive gaming industry.
In a detailed statement, Judge Corley said, “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.”
Judge Corley noted that the court’s responsibility was to determine whether the merger should be halted or possibly terminated while the FTC administrative action was being resolved. However, she concluded, “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.”
The decision by Judge Corley has been met with applause from Microsoft and Activision Blizzard. Microsoft president Brad Smith said in a statement, “We are grateful to the Court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution.” Meanwhile, Bobby Kotick, CEO of Activision Blizzard, touted the benefits of the merger saying, “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.”
However, this is only a victory in the U.S., and the UK’s Competition and Markets Authority still stands in the way of a worldwide closure. The CMA blocked the proposed acquisition in April, and Microsoft is currently appealing that decision. A hearing is scheduled for July 28th. Should Microsoft choose to close the deal in the U.S. ahead of the July 18th deadline, they could still face legal challenges in the UK.
