US court boost for Microsoft/Activision deal
July 12, 2023
By Colin Mann
The chances of Microsoft taking over video games publisher Activision Blizzard have been boosted after a US judge rejected a request from US regulators to block the deal.
The US Federal Trade Commission (FTC) asked a judge to block Microsoft’s $69 billion (€63.9bn) takeover suggesting the deal could “substantially lessen competition” in the sector.
Judge Jacqueline Scott Corley said she did not think the regulator would win in its case. “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,” she wrote in her decision.
The ruling comes after the deal was approved by the European Union, while an attempt to block the merger in the UK is currently under appeal.
Microsoft president Brad Smith said the company would now turn its focus to the UK, revealing that Microsoft and the UK’s Competition and Markets Authority (CMA) had agreed to put litigation on hold while the company sought to address the regulators concerns, which had focused on the cloud gaming market.
“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,” said a spokesperson for the CMA.
“Our merger will benefit consumers and workers. It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry,” stated Bobby Kotick, chief executive of Activision Blizzard, telling company staff: “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 UK regulators to address any remaining concerns so our merger can quickly close.”
The FTC can appeal the ruling, and has also separately challenged the merger in a parallel process running in administrative court.
“We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles,” said FTC spokesperson Douglas Farrar. “In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers.”