Source: Anadolu Agency / Getty / Microsoft / Activision Blizzard
Microsoft has just defeated another boss in the FTC on its mission to acquire Activision Blizzard.
After weeks of learning sensitive information that gamers wouldn’t be privy to, thanks to the Microsoft v. FTC trial, we finally have a verdict.
A California judge ruled in favor of Microsoft, allowing the tech giant to complete its astounding $69 billion acquisition of Call of Duty, Diablo IV, and other popular video game IPs, Activision Blizzard.
Spotted on The Verge, after listening to arguments from both sides, Judge Jacqueline Scott Corley denied the FTC’s request for a preliminary injunction. While this significant hurdle has been cleared, Microsoft still has to worry about an ongoing antitrust case by the Federal Trade Commission.
Judge Corley’s Ruling Per The Verge:
Microsoft’s acquisition of Activision has been described as the largest in tech history. It deserves scrutiny. That scrutiny has paid off: Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox. It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements to, for the first time, bring Activision’s content to several cloud gaming services.
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.
Microsoft’s argument that it is committed to keeping Call of Duty on PlayStation while expanding its availability to the Nintendo Switch was enough to convince the judge in its favor.
But Judge Corely did consider some of the FTC’s arguments regarding Microsoft’s Cloud Gaming agreements and Microsoft’s stance on the Nintendo Switch’s place in the console market while also considering the FTC’s claim that it is not.
Judge Corley also considered the FTC’s argument that the console market does not include PCs.
The Statements From Microsoft & Xbox Representatives Are Rolling In
As expected, the obviously prepared statements from Microsoft hit Twitter timelines swiftly following the announcement of the decision.
Microsoft president Brad Smith said Microsoft was “grateful to the Court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution.”
“Our merger will benefit consumers and workers,” said Activision Blizzard’s embattled CEO Bobby Kotick. “It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.”
“We’re grateful to the court for swiftly deciding in our favor. The evidence showed the Activision Blizzard deal is good for the industry, and the FTC’s claims about console switching, multi-game subscription services, and cloud don’t reflect the realities of the gaming market,” adds Xbox boss Phil Spencer.
The FTC Expresses Disappointment & Is Planning Its Next Move
Following Judge Corley’s decision, FTC spokesperson Douglas Farrar said the FTC is unhappy with the ruling and still planning its next move. “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,” Farrar said.
So What Does The Decision Mean For Microsoft & Xbox?
The Verge reports that Microsoft can now close its Activision Blizzard deal before the July 18 deadline. But that can only happen if the tech giant is willing to close the deal around the UK, blocking the agreement or the Competition and Markets Authority (CMA) figures out a solution.
Well, that also won’t be an issue. Brad Smith announced, “Microsoft and Activision have agreed with the CMA that a stay of the litigation in the UK would be in the public interest, and the parties have made a joint submission to the Competition Appeal Tribunal to this effect.” At the same time, they work to address issues and concerns.
The FTC has until 11:59 pm July 14 to appeal the decision, but based on its track record and not appealing the Meta ruling, there is a good chance they will bow out on this mission.
Video Game Twitter Reacts
Reactions from video game Twitter are abound, mainly people celebrating and saying Hallelujah that this long, drawn-out process is nearing an end and Xbox can now focus on the most important thing, video games.
Congrats on the victory, Microsoft and Xbox; you can see more reactions in the gallery below.
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Photo: Anadolu Agency / Getty