A possible last-ditch effort by the Federal Trade Commission (FTC) to stop Microsoft from acquiring Activision Blizzard has failed. It was a clear victory for the megacorporation in the Microsoft vs. FTC trial when Judge Jacqueline Scott Corley rejected the FTC’s request for a preliminary injunction.
Our statement on today decision: pic.twitter.com/bM9rM0kZgd
— Brad Smith (@BradSmi) July 11, 2023
According to Judge Corley,
“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.”
It further states:
“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.”
FTC’s take on how things turned out
Based on FTC spokesperson Douglas Farrar’s perspective, they were disappointed in this outcome since it poses a clear threat to open competition in cloud gaming, subscription services, and consoles. They will be announcing their next move in the coming days as they continue to battle to protect consumers and maintain competition in the industry.
The FTC has now suffered a second setback when a US federal court earlier this week rejected its request for a preliminary injunction to stop Microsoft from acquiring Activision Blizzard until the resolution of a different FTC administrative dispute.
A big win for Xbox
Brad Smith, the president of Microsoft, said the corporation was “grateful” for the court’s ruling in the Microsoft vs. FTC trial.
“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.”
Phil Spencer, the head of Xbox, also had words of gratitude to express.
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
What’s next for Microsoft?
Following the Microsoft vs. FTC trial, the American megacorporation has the option to finalize the acquisition prior to the deadline of July 18. However, the business still has to clear several regulatory obstacles with organizations like the UK’s Competition Markets Authority (CMA).
Considering how the deal may now be modified a bit further, a settlement between Microsoft, Activision, and the CMA will prevent further litigation in the UK. Microsoft’s appeal in the UK will now be put on hold until the three parties negotiate a mutually agreeable reorganization of the deal.
The timetable for final undertakings has been moved from July 18 to August 29 as a result of the CMA earlier today issuing a notice of extension for its overall investigation into the merger.
After Bloomberg claimed that Microsoft was contemplating selling UK cloud-gaming rights to a telecoms, gaming, or internet business to enable the Activision transaction to finish in the UK, the CMA announced its extension just hours later.
