Microsoft has won a crucial court case against the United States Federal Trade Commission (FTC), which paves the way for Microsoft to close the acquisition of Activision Blizzard.
Having listened to arguments from both parties across five days, Judge Jacqueline Scott Corley has today denied the FTC’s motion for a preliminary injunction. Had the judge ruled in favour of the FTC, it would have all but ended Microsoft’s bid to acquire the Call of Duty publisher.
In the conclusion of the ruling, Judge Corley said the following:
“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.”
Responding to the Judge’s verdict, Microsoft Vice Chair and President Brad Smith expressed his gratitude for the court’s “quick and thorough decision”, while continuing to commit to finding solutions regarding any “regulatory concerns”.
“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.” Smith said.
“As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”
Head of Xbox Phil Spencer also reacted to the ruling, suggesting that the FTC’s case was based on an inaccurate interpretation of the games industry.
“We’re grateful to the court for swiftly deciding in our favor.” Spencer said. “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.”
Spencer continued: “Since we first announced this deal, our commitment to bringing more games to more people on more devices has only grown. We’ve signed multiple agreements to make Activision Blizzard’s games, Xbox first party games and Game Pass all available to more players than they are today.
“We know that players around the world have been watching this case closely and I’m proud of our efforts to expand player access and choice throughout this journey.”
Providing that the FTC don’t launch a potential appeal, this ruling would likely be the penultimate step before attempting to close the deal. Microsoft’s attention will likely turn back to their appeal against the UK’s Competition and Markets Authority (CMA), after it moved to block the deal back in April.
Microsoft will be looking to complete the acquisition as soon as possible, with the current agreement set to expire on July 18th, which is just seven days away at the time of writing.