Microsoft wins FTC trial that sought to stop Activision Blizzard takeover

Court will not hinder Microsoft from proceeding with the deal

The Federal Trade Commission (FTC) has failed to convince a Californian court to issue a preliminary injunction against Microsoft’s proposed $69 billion takeover of Activision Blizzard.

Judge Jacqueline Scott Corley denied the regulator’s request to temporarily halt the deal from going through, which the FTC wanted to have in place to continue with its investigation of the case. Microsoft still faces this antitrust case, but without a preliminary injunction it could now proceed to close the deal in spite of it.

”(...) 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 ruling said.

The UK’s Competition and Market Authority (CMA) did not approve of the takeover either, but pretty much every other big regulator on the planet did – including the watchdogs of the European Union and China.

Microsoft reportedly is exploring options to circumnavigate the CMA’s block of the acquisition, a step that’s likely been made easier after having outmaneuvered the FTC at court. Spectators of the proceedings, which took five days in total and produced some stunning headlines due to all the inside information going public, have repeatedly commented that they weren’t impressed by how the FTC presented its case before the judge.

Microsoft’s Brad Smith stated in reaction to the ruling that he was “grateful” and hoped that other jurisdictions would work as quickly to come to a resolution of the case.

Our statement on today decision: pic.twitter.com/bM9rM0kZgd

— Brad Smith (@BradSmi) July 11, 2023

Xbox chief Phil Spencer had similar words.

1/We're grateful to the court for swiftly deciding in our favor. 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.

— Phil Spencer (@XboxP3) July 11, 2023

According to The Verge, the most likely scenario for the immediate future is that Microsoft and Activision Blizzard will extend their merger agreement for a bit, covering Microsoft’s attempt to appeal the CMA’s decision. Winning this appeal in another legal battle would probably be less complicated than closing the deal while tip-toeing around the UK – that seems like Microsoft’s ultima ratio.