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 strike 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 Authority’s decision from July 28.
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.
