Update #2 [Sat 15th Jul, 2023 04:30 BST]: Federal Trade Commission in the USA he officially lost the appeal and now he has also been denied a restraining order. This means that Microsoft can now close its acquisition of Activision Blizzard in this part of the world. This needs to be done by July 18 and he is expected to complete the work very soon. It also means that Microsoft’s plan to bring Call of Duty to Nintendo platforms is back on track.
Here’s what Vice President and President of Microsoft Brad Smith had to say about it in a press release:
“We appreciate the Ninth Circuit’s swift response in denying the FTC’s motion to further delay Activision’s contract. This brings us another step closer to the finish line in this marathon of global regulatory revisions.”
Microsoft is still dealing with the UK’s Competition and Markets Agency, and the CMA is moving its deadline from July 18 to August 29. Fortunately for the tech giant, it appears to be the two sides will be able to find a solution.
Update #1 [Thu 13th Jul, 2023 10:00 BST]: If you thought the conflict over Microsoft’s acquisition of Activision Blizzard was over, think again. Earlier this week, a California judge ruled in Microsoft’s favor and denied the Federal Trade Commission’s request for a preliminary injunction against the deal. The FTC has now appealed that decision.
The news was shared by a senior editor at The Verge @tomwarrenwhich noted that the regulatory argument behind the appeal has not yet been made and will likely remain so until it is filed with the Ninth Circuit Court of Appeals — which could then issue an “emergency stay to extend the existing temporary restraining order“, which currently expires on July 14.
Microsoft President Brad Smith took to Twitter to issue a statement about the complaint, noting the company’s disappointment that “the FTC continues to pursue what has become an obviously weak case”:
Of course, there’s no guarantee the appeal will be upheld before the July 18 deal deadline, meaning Microsoft could still complete the acquisition as early as next week. just last night Nasdaq announced that Activision-Blizzard will be removed from the Nasdaq-100 ESG Index before the market opens on July 17, signaling that the company will cease to be its own entity. Microsoft’s preparations seem to be well underway.
This could lead to more pressure on Microsoft to reach a deal with the UK on competition and markets, which is still defying a deal.
Original article [Tue 11th Jul, 2023 17:35 BST]: After five days of evidence, a California judge 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 be made in the US.
We’re not quite at the finish line yet — the deal is still blocked in the UK, mind you — but today’s result means Microsoft can get the ball rolling on the US takeover and start fulfilling its legally binding obligation to bring Call of duty on Nintendo consoles.
The court filed a 53-page document earlier today, in which Judge Corley sided with all of Microsoft’s claims, including “an agreement with Nintendo to bring Call of Duty to Switch.” You can find part of this conclusion below:
Microsoft’s acquisition of Activision has been described as the largest in technology history. It deserves close examination. That reconsideration paid off: Microsoft has committed in writing, publicly and in court, that Call of Duty on PlayStation will be equal to Xbox for 10 years. She made a deal with Nintendo to bring Call of Duty to the Switch. And it has struck several deals to bring Activision’s content to several cloud gaming services for the first time.
The responsibility of this court in this case is narrow. It remains to be decided whether, notwithstanding these current circumstances, the merger should be halted – perhaps even terminated – pending resolution of the FTC’s administrative action. For the reasons explained, the Court finds that the FTC has not shown a likelihood of prevailing on its claim that this particular vertical merger in this particular industry is likely to substantially lessen competition. On the contrary, record evidence points to greater consumer access to Call of Duty and other Activision content. Therefore, the proposal to determine a temporary measure is REJECTED.
After the verdict, Microsoft President Brad Smith released a statement about Twitterexpressing the company’s gratitude to the court:
The result of the court hearing means that Microsoft now has until July 18 to conclude a deal with Activision, however, the deal is still blocked in the UK and will remain so until Microsoft can appeal the Competition and Markets Agency’s decision on 28 . July.
Either the deal will be concluded around the UK or the CMA should be willing to negotiate now that both the US and the EU have approved the deal. We would not be surprised if the July 18 deadline is extended so that the CMA hearing can take place first.
Smith took to Twitter again to make a different statement about the CMAs topic. He noted that Microsoft still disagrees with the CMA’s position, although the company is currently “considering how the transaction could be modified to address these concerns”:
It’s not a done deal, then, but things certainly seem to be shifting in Microsoft’s favor.
Do you think the CMA will relent now that the FTC request has been denied? Can the debate really go on much longer? Let us know your thoughts in the comments.
