A federal judge in San Francisco has denied the Federal Trade Commission’s motion for a preliminary injunction to stop Microsoft from completing its acquisition of video game publisher Activision Blizzard, CNBC reported.
The deal isn’t completely in the clear, though. The FTC can now bring the decision to the U.S. Court of Appeals for the 9th Circuit, and the two companies must find a way forward to resolve opposition from the Competition and Markets Authority in the United Kingdom.
“This Court’s responsibility in this case now is narrow. It its to decide if, notwithstanding these current circumstances, the merger should be halted – perhaps even terminated – pending resolution of the FTC administrative action,” Judge Jacqueline Scott Corley wrote in her decision, published Tuesday. “For the reasons explained, 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. 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.”
Microsoft Vice Chair and President Brad Smith tweeted: “Our statement on today’s decision: 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. As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”
Activision posted the following on its corporate news website:
Activision Blizzard CEO Bobby Kotik sent the following email to employees on Tuesday:
Today, a U.S. federal judge ruled in our favor, denying the Federal Trade Commission’s attempt to block our merger with Microsoft.
We’re grateful to the court for the way this process was handled and the thoughtfulness of the decision. The U.S. joins the 38 countries where our deal can proceed – these decisions are based on facts and data that show our merger is good for players and for competition in the industry.
We’re optimistic that today’s ruling signals a path to full regulatory approval elsewhere around the globe, and we stand ready to work with the UK regulators to address any remaining concerns so our merger can quickly close.
We’ll continue to keep you updated on our progress. Thank you for all you do for our players, for our company, and for each other.
The Verge reported that in a statement, the FTC spokesperson Douglas Farrar said the FTC was still planning its next move. “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,” said Farrar.
According to The Verge, the judge’s ruling now allows Microsoft to close its Activision Blizzard deal ahead of the July 18th deadline, but only if the company is willing to close around the UK or if the Competition Markets Authority (CMA) is willing to negotiate some form of remedy. The UK regulator moved to block Microsoft’s proposed acquisition in April, and Microsoft is currently appealing that decision with a hearing set to start on July 28th.
The CMA confirmed the decision in a statement to The Verge, noting that the regulator is “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.”
The Competition Appeal Tribune (CAT) will need to approve or deny this request, but it’s more than likely that it will be approved to allow both parties to negotiate further.
In my opinion, it appears that the Microsoft -Activision acquisition has a good chance of happening. The CMA appears to want to work with Microsoft to come to some sort of agreement. If this goes well, Microsoft will have one more country that approves the acquisition.