In a huge loss for the Biden administration, a US federal court authorized Microsoft Corp’s $69 billion acquisition of Activision Blizzard Inc on Tuesday. Judge Jacqueline Scott Corley issued the decision in San Francisco, allowing Microsoft to complete its merger with Activision ahead of a July 18 deadline everywhere except the United Kingdom, which denied the deal in May.
Judge Corley noted in her 53-page opinion, “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 stated, the court concludes that the FTC has not demonstrated a likelihood of success in its allegation that this particular vertical merger in this unique industry may significantly reduce competition. (https://picklelicious.com/) “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.”
The Court’s decision’s implications
The decision would give Microsoft ownership over popular gaming properties like “Call of Duty,” “World of Warcraft,” and “Diablo.” The US anti-trust regulator, the Federal Trade Commission, had objected to the merger, claiming that it would harm gamers by giving Microsoft control over a number of immensely popular properties.
They claimed that a preliminary injunction was required because the combination would have caused immediate harm to video gamers and other consumers. The regulators asked Judge Corley for an injunction to stop the deal from closing until the agency’s in-house court had reached a decision on the deal.
Microsoft responds
Following the agreement, Microsoft President Brad Smith stated that the company was “grateful to the Court in San Francisco for this quick and thorough decision and hope that other jurisdictions will continue working towards a timely resolution.” Xbox CEO Phil Spencer, a crucial witness in the trial, also responded on Twitter, stating, “We’re grateful to the court for swiftly deciding in our favour.” He said, “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.”
The FTC is ‘disappointed’
Meanwhile, FTC spokesperson Douglas Farrar expressed unhappiness with the decision and stated that the agency was considering its future steps. “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 in a statement.