The United States District Court for the Northern District of California has rejected the request made by the US Federal Trade Commission (FTC) to halt Microsoft’s acquisition of Activision Blizzard. Earlier this year, the FTC filed an injunction against Microsoft, claiming that the merger would have negative implications for competition in the global gaming industry. However, the court has now dismissed the injunction, giving Microsoft the green light to proceed with the acquisition.
Judge Jacqueline Scott Corley, who presided over the case, acknowledged the significance of Microsoft’s acquisition of Activision and emphasized the need for careful examination. However, she concluded that Microsoft’s commitments to non-exclusivity of the popular game Call of Duty and its agreements with cloud gaming providers were crucial factors in her decision. Microsoft has made written, public, and court commitments to ensure that Call of Duty remains available on PlayStation for the next decade, on par with Xbox. Moreover, the company has also reached an agreement with Nintendo to bring Call of Duty to the Switch console and has forged partnerships to introduce Activision’s content to various cloud gaming services.
According to the court ruling, the FTC failed to demonstrate a high likelihood of successfully arguing that this specific vertical merger in the gaming industry would significantly diminish competition. On the contrary, the evidence presented indicates that consumers will benefit from increased access to Call of Duty and other Activision content.
Microsoft’s Appeal with the UK’s Competition and Markets Authority Paused
Following the announcement of the court’s decision, Microsoft President Brad Smith revealed that the company’s ongoing appeal with the UK’s Competition and Markets Authority (CMA) has been temporarily put on hold. Microsoft and Activision have agreed to collaborate in order to find a mutually agreeable solution to address concerns related to cloud gaming. Both parties have submitted a joint request to the Competition Appeal Tribunal, stating that a stay of the litigation in the UK would be in the public interest.
Resolving any outstanding issues with the CMA is likely to be the final obstacle before Microsoft can proceed with the acquisition of Activision Blizzard. More details regarding this decision and any remaining complications are expected to emerge in the upcoming weeks.