In a recent development, California Judge Jacqueline Scott Corley has ruled in favor of Microsoft, allowing the tech giant to proceed with its acquisition of Activision Blizzard. Following five days of intense testimony, the judge denied the Federal Trade Commission’s (FTC) request for a preliminary injunction. While Microsoft still faces an ongoing antitrust case by the FTC, Judge Corley’s decision signifies a significant victory for the company.
Judge Corley’s ruling took into account Microsoft’s commitments to maintain Call of Duty on PlayStation and expand its availability to Nintendo Switch. The court recognized the significance of Microsoft’s written, public, and court-confirmed commitment to ensuring Call of Duty remains accessible on PlayStation for a period of ten years, along with the agreement to bring the game to Nintendo Switch. Furthermore, Microsoft’s agreements to make Activision’s content available on various cloud gaming services were also considered.
The court’s role in this case was to determine whether the merger should be halted or terminated while the FTC’s administrative action is pending. Judge Corley found that the FTC had not demonstrated a likelihood of prevailing on its claim that this specific vertical merger within the gaming industry would substantially reduce competition. On the contrary, the evidence presented pointed to increased consumer access to Call of Duty and other Activision content. Therefore, the motion for a preliminary injunction was denied.
Despite the judge’s ruling, the FTC remains determined to address its concerns. FTC spokesperson Douglas Farrar expressed disappointment in the outcome and emphasized the perceived threat that the merger poses to open competition in cloud gaming, subscription services, and consoles. The FTC plans to announce its next course of action in the coming days.
While the judge’s decision allows Microsoft to proceed with the Activision Blizzard acquisition before the July 18th deadline, certain conditions apply. The company must either close the deal around the United Kingdom or negotiate a remedy with the UK’s Competition and Markets Authority (CMA). Microsoft is currently appealing the CMA’s decision to block the acquisition, with a hearing scheduled for July 28th.
European regulators granted approval for the deal in May. This means that Microsoft could technically proceed without the UK’s involvement and without a US injunction. However, Microsoft and the CMA are actively seeking a resolution to address the CMA’s concerns regarding cloud gaming.
The FTC has the option to appeal Judge Corley’s decision until 11:59 PM PT on July 14th, but the regulator did not appeal a similar decision permitting Meta’s acquisition of Within.