US Judge gives Microsoft x Activision Blizzard deal a green light

FTC still has time till 14th July to make any appeal if they see fit.


US Judge gives Microsoft x Activision Blizzard deal a green light

Microsoft x Activision Blizzard Deal

It has been over a year and a half since the initial announcement regarding the Microsoft x Activision Blizzard deal came out. With multiple blockades on the deal, the initial stages didn’t look too good for the company. With constant antitrust issues and resistance from the UK CMA, Microsoft x Activision Blizzard deal has finally received the green light.

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On 11 July, a US Judge ruled that Microsft could move forward with their acquisition of Activision. This ruling follows the antitrust authorities’ rejection of their plea for a preliminary injunction to halt the $69 billion acquisition temporarily. The UK CMA, which initially halted the acquisition deal in April, has said they would consider this proposal. However, the UK CMA will only do so if the antitrust concerns regarding the UK Activision shares, which increased from 5% to 10%, are resolved.

The Federal Trade Commission filed this case against Microsoft, and with this ruling, Microsoft has come out on top. However, the US court in San Francisco has given FTC until 14th July to appeal to the Judge’s decision. FTC had filed this case against Microsoft due to many antitrust reasons regarding the current gaming industry. Microsoft gaining exclusive control over games produced by Activision was one of the reasons.

Related: Microsoft x ABK Deal Raises Concerns in UK: UK CMA Says EU was “Wrong” to approve the deal

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Court ruling in detail

US Judge gives Microsoft x Activision Blizzard deal the green light
(credits: CNBC Television on YouTube)

The case filed by the FTC against the Microsoft x Activision Blizzard deal ruled in favor of Microsoft on 11th July. Moreover, the court rejected FTC’s major claim that Microsoft would gain exclusive control over Activision-produced games. The FTC was concerned that this deal would restrict other platforms from having availability to any game published by Activision. Judge Jacqueline Scott Corley totally disagreed with this and gave her opinion on this matter. She wrote,

“The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets.”

Douglas Farrar, the spokesperson for FTC, relayed the thoughts of the antitrust regulator. He said,

“The antitrust regulator was disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles. In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers.”

Considering the payout of this deal, it is one of the biggest acquisitions in the gaming industry. The business was “grateful” for the “quick and thorough” ruling, Microsoft President Brad Smith tweeted. Bobby Kotick, Activision Blizzard CEO, said,

“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.”

Bobby Kotick, CEO of Activision Blizzard

In order to allay the FTC’s worries, Microsoft agreed to grant licenses for “Call of Duty” to competitors, including a 10-year deal with Nintendo, subject to the merger’s completion. Microsoft CEO Satya Nadella said during the five-day trial in June that the business would have no motivation to exclude Sony’s PlayStation or other competitors in order to sell more Microsoft Xbox devices.

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There are still concerns raised by UK CMA. However, with the greenlight from the US court, it’s just a matter of time for the Microsoft x Activision Blizzard deal to go through. Gamers are early waiting for this deal to move forward so they can see the improvement Microsoft can bring to the franchise.

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