A federal judge in San Francisco has denied the Federal Trade Commission’s motion for a preliminary injunction to prevent Microsoft from completing its acquisition of video game publisher Activision Blizzard.
However, the deal is not entirely clear. The FTC can now appeal the decision to a federal appeals court, and the two companies must find a way to resolve the opposition from the UK Competition and Markets Authority.
“The liability of this Court in this case is limited. It is to decide whether, despite these current circumstances, the merger should be halted, perhaps even rescinded, pending the resolution of the FTC’s administrative action,” Judge Jacqueline Scott Corley wrote in your decision, posted on Tuesday. “For the reasons explained, the Court finds that the FTC has failed to demonstrate the likelihood of prevailing in its claim that this particular vertical merger in this specific industry may substantially reduce competition. To the contrary, the evidence in the record points to increased consumer access to Call of Duty and other Activision content. Therefore, the motion for precautionary measure is DENIED.”
Activision Blizzard shares hit a session high of $88.03 per share after the US District Court for the Northern District of California issued the decision. Microsoft had agreed to buy the game publisher for $95 per share.
“We are optimistic that today’s ruling points a path towards full regulatory approval worldwide, and we stand ready to work with UK regulators to address any remaining concerns so that our merger can be closed quickly,” the CEO wrote. of Activision Blizzard, Bobby Kotick, in a statement. memorandum to the employees
Microsoft also praised the decision.
“We are grateful to the San Francisco court for this swift and thorough decision and hope that other jurisdictions will continue to work toward a timely resolution,” Brad Smith, Microsoft president and vice president, said in a statement. “As we have consistently demonstrated throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”
The decision comes later five days of court hearings to assess whether Microsoft could complete the $68.7 billion Activision Blizzard acquisition that he announced in 2022. Judge was deciding whether to grant the FTC’s request for an emergency injunctive relief to prevent the deal from closing.
The FTC argued that Microsoft has shown an interest in making some games exclusive, to prevent them from appearing on Sony’s PlayStation or Nintendo’s Switch, and that it could do so if the deal were to close. But Microsoft said the company would want to make Activision titles more available, rather than less, in part to grow people’s subscription to its Game Pass library of games. Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick testified, as did executives from Alphabet, Nvidia and Sony.
In December, the Federal Trade Commission lawsuit filed to block the settlement and have it reviewed by an administrative law judge from the agency. But in June, before that could happen, the FTC required a preliminary injunction to prevent Microsoft from completing the acquisition, with a view to bringing the case before its administrative law judge on August 2. The two companies were looking to close the deal before July 18.
“We are disappointed with this result given the clear threat this merger poses to open up competition in cloud gaming, subscription services and consoles. In the coming days we will be announcing our next step to continue our fight to preserve competition and protect consumers,” said an FTC spokesperson.
Kotick said during the hearings that Activision Blizzard’s board did not see how the deal could continue if the judge granted the preliminary injunction.
Now the two companies are turning their attention to Europe.
“Following today’s court decision in the US, our focus now turns to the UK. While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified to address those concerns in a way that is acceptable to the CMA,” Smith said in a statement. “In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of litigation in the UK would be in the public interest and the parties have filed a joint submission with the Competition Appeal Tribunal to that effect. effect.
