In line with what analysts and insiders had predicted, the US federal court has ruled in favour of Microsoft’s $68.7 billion purchase of Activision Blizzard.
Following a recent week-long legal battle against the FTC (Federal Trade Commission) in US Federal Court, in which Xbox higher-ups like Phil Spencer, Sarah Bond and Matt Booty were given the chance to make their case against the regulator’s initial decision to block – and file an injunction against – its $68.7 billion purchase, the judge has decided to approve Microsoft’s acquisition of Activision Blizzard. The decision comes just under two weeks after several revelations about the video game industry, such as Xbox's plans to buy Sega and Starfield's exclusivity status, were revealed.
This ruling is an unequivocal win for the Xbox maker, who obviously did enough to convince Judge Corley that its purchase of Activision Blizzard wouldn’t be anti-competitive within the video game space. The judge considered arguments from both sides following the end of last week, ultimately opting to deny the FTC’s request for a preliminary injunction.
X marks the spot
In her official statement seen in the case documents, Judge Corley said “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,” while also citing that the purchase, described by Corley as “the largest in tech history”, was a worthwhile thing to scrutinise, despite the Court’s ultimate decision.
Microsoft president Brad Smith posted a tweet following the ruling saying the company 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.”
The US Court's decision essentially now means that Microsoft will be able to close the deal prior to its June 18th deadline, providing it is willing to work around the UK restrictions that come as a result of the CMA's decision to block the Microsoft Activision deal. By contrast, European regulators gave the deal the go-ahead as far back as May, so it really just would be the UK where Microsoft would be forced to operate slightly differently.
Speaking of the CMA, the UK regulator released its own statement regarding the FTC's preliminary injunction being denied. "We stand ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our Final Report", a spokesperson said in an email, essentially standing by its decision but welcoming Microsoft in to renegotiate.
Pending a potential appeal from the FTC, this removes one of the final roadblocks standing in Microsoft's way with regards to having Activision Blizzard welcomed into the Xbox first-party family of studios. Until then, Microsoft is set to once again argue its case in a UK court against the CMA later this July.
