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Major Setback for FTC as Judge Clears Microsoft’s Acquisition of Activision Blizzard

 |  July 11, 2023

After a seemingly endless battle between the Federal Trade Commission (FTC) and Microsoft, the U.S. District Court for the Northern District of California has handed down a decisive ruling that allows the tech giant to move forward with its $69 billion acquisition of Activision Blizzard. 

The move marks a major win for Microsoft, which has been locked in a legal battle with the FTC since December when the regulator filed an injunction to hold up the deal, reported The Washington Post. 

The five-day trial concluded with Judge Jaqueline Scott Corley delivering her decision in a 53-page redacted ruling. The FTC alleged the acquisition was anticompetitive and had asked the court to intervene, but Corley disagreed, saying that it had failed to present evidence that the deal would reduce competition in the video game industry.

“The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets,” wrote Corley.

Read more: FTC To File Injunction To Stop Microsoft’s Activision Blizzard Buy: Report

Although Microsoft has now been cleared to proceed with the acquisition, it is still required to address concerns by the U.K. Competition & Markets Authority, which had previously blocked the deal on the grounds that it would give Microsoft too much power in the rapidly growing cloud gaming market. Microsoft president Brad Smith acknowledged the ruling and expressed his hope for a resolution that is amicable for both parties, saying, “We’re grateful to the court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution.”

Activision Blizzard CEO Bobby Kotick reiterated Smith’s sentiment, adding that the deal will benefit consumers and workers, and help enable competition in an industry that is growing exponentially each day. Phil Spencer, the head of Xbox, also remarked on the matter, saying, “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, on the other hand, was clearly disappointed with the outcome. Spokesperson Douglas Farrar stated, “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.”

The ruling is seen as a major win for Microsoft and one that will set an important precedent for the tech industry. With Judge Corley’s decision, the ball is now firmly in Microsoft’s court, and the tech giant is looking to close the deal ahead of the July 18th deadline. Regardless of the outcome, it is clear that this will be a landmark moment in tech history that will be closely watched.