FTC Injunction Denied by Judge in Microsoft’s Acquisition of Activision Blizzard

A verdict has been delivered on the Federal Trade Commission’s request for a preliminary injunction to block Microsoft’s acquisition of Activision Blizzard. The judge denied the injunction, allowing the deal to go through before its deadline on July 18th. However, it must still negotiate with the Competition and Markets Authority in the United Kingdom, which blocked the acquisition back in April.

Judge Jacqueline Scott Corley stated, “This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted – perhaps even terminated – pending resolution of the FTC administrative action. For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition.

“To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.”

In a recent tweet, Microsoft president Brad Smith said, “We’re grateful to the Court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution.”

Activision Blizzard CEO Bobby Kotick also said (via The Verge), “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.”

As for the FTC, spokesperson Douglas Farrar said, “We are 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.”

The FTC could appeal the decision before July 14th, 11:59 PM PT, so we’ll have to wait and see if it does. It’s worth noting that Microsoft has appealed against the CMA’s decision to block its acquisition, with a hearing to begin on July 28th. If the deal doesn’t close by the 18th, Activision Blizzard will receive a termination fee of $3 billion from Microsoft.

Microsoft has reportedly discussed some solutions, like not selling Activision Blizzard products in the UK or having the latter withdraw from the region entirely. As always, stay tuned for more updates.