After five days of providing evidence, a California judge has today denied the Federal Trade Commission’s request for a preliminary injunction against Microsoft’s acquisition of Activision Blizzard. In short, the deal can now go ahead in the US.
We’re not across the finish line just yet — the deal is still blocked in the UK, remember — but today’s result means that Microsoft can get the ball rolling on the takeover in the US and start to make good on the legally-binding commitment to bring Call of Duty to Nintendo consoles.
The court filed a 53-page document earlier today, in which Judge Corley sided with all claims made by Microsoft, including “an agreement with Nintendo to bring Call of Duty to Switch”. Part of this conclusion can be found below:
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.
Following the ruling, Microsoft president Brad Smith published a statement on Twitter, expressing the company’s gratitude to the court:
The result of the court hearing means that Microsoft now has until the deadline of 18th July to close the deal with Activision, however, the deal is still blocked in the UK and will remain that way until Microsoft is able to appeal the Competition and Markets Authority’s decision on 28th July.
Either, the deal will be closed around the UK or the CMA needs to be willing to negotiate now that both the US and the EU have approved the deal. We wouldn’t be surprised to see the 18th July deadline get an extension so that the CMA hearing can take place first.
Smith took to Twitter once again to provide a different statement on the topic of the CMA. He noted that Microsoft still disagrees with the CMA’s stance, though the company is currently “considering how the transaction might be modified in order to address those concerns”:
It isn’t a done deal just yet, then, but it certainly seems that things are shifting in Microsoft’s favour.
Do you think that the CMA will budge now that the FTC’s request has been denied? Can the debate really go on for much longer? Let us know your thoughts in the comments.
