After a long wait, we now know the outcome of the recent trial between the Federal Trade Commission (FTC) and Microsoft. A California judge, named Jacqueline Scott Corley ruled in favour of Microsoft which made them proceed with its acquisition of Activision Blizzard after a five-day hearing, marking a big victory for the tech giant.
Despite the Federal Trade Commission’s (FTC) continuing antitrust investigation, Judge Jacqueline Scott Corley dismissed the regulator’s request for a preliminary injunction, allowing the merger to proceed. The court’s ruling was influenced by Microsoft’s pledge to keep Call of Duty on PlayStation and expand it to the Nintendo Switch.
Today’s decision significantly enhances Microsoft’s chances of finalising the deal, despite the UK’s Competition and Markets Authority (CMA) still standing in opposition.
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Judge Corley emphasised in her decision that Microsoft had made express undertakings to keep Call of Duty on PlayStation for the next ten years and to bring the game to the Nintendo Switch. She also mentioned Microsoft’s relationships with Activision to provide their content to other cloud gaming services.
The judge determined that the FTC had failed to present sufficient evidence to support its argument that the merger would significantly reduce competition. Microsoft President Brad Smith thanked the court for its judgement, while Xbox Head Phil Spencer noted that the facts given had refuted the FTC’s statements about the gaming market.
Our statement on today's decision: pic.twitter.com/jRDD8PhBeT
— Brad Smith (@BradSmi) July 11, 2023
Activision Blizzard has also reacted to the decision. “Our merger will benefit consumers and workers,” Bobby Kotick, Activision Blizzard’s CEO, said in a statement. “It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.”
The FTC will now have the opportunity to appeal Judge Corley’s verdict by 11:59 PM PT on 14 July, but because the regulator did not fight a court decision allowing Meta to purchase Within, it may instead drop its action against Microsoft and Activision Blizzard.
If the court judgement is upheld, this will be FTC Chair Lina Khan’s second big setback as the regulator’s leader. Khan has been pursuing Big Tech firms since her appointment as the agency’s director in 2021.
UK and Microsoft to Restart Negotiations
3/We know that players around the world have been watching this case closely and I’m proud of our efforts to expand player access and choice throughout this journey. END
— Phil Spencer (@XboxP3) July 11, 2023
Microsoft and the UK’s Competition and Markets Authority (CMA) have agreed to pause their legal battle for further negotiations. The pause is intended to address the CMA’s concerns about cloud gaming.
Microsoft is looking to revise the purchase agreement in order to address these concerns, and both parties have jointly requested a halt from the Competition Appeal Tribunal. The CMA emphasised its willingness to consider any Microsoft offers that would address its concerns.
