The rejection of the Federal Trade Commission’s request paves the way for the deal to proceed without any significant obstacles
On Friday, a US appeals court dismissed the Federal Trade Commission’s plea to halt Microsoft’s $69 billion acquisition of Activision Blizzard, the creator of Call of Duty.
With this court ruling, one of the last obstacles preventing Microsoft, known for its Xbox gaming platform, from finalizing the deal and expanding its gaming enterprise has been eliminated.
The US Federal Trade Commission (FTC) had also sought a stay from Judge Jacqueline Scott Corley of the US District Court in Northern California, but her request denial came late on Thursday.
The FTC did not respond immediately when asked for a comment.
Brad Smith, Microsoft’s President, expressed gratitude for the swift response from the Ninth Circuit, rejecting the FTC’s motion to further delay the deal. He stated, “This brings us closer to the finish line in this extensive global regulatory review process.”
While this deal, the largest ever in the video game industry, is progressing, it still requires approval in Britain.
Unless an extension is negotiated, the merger agreement between Microsoft and Activision, a prominent game developer responsible for titles like World of Warcraft and Candy Crush Saga, is set to expire on 18 July. After this date, either company will have the option to terminate the deal.
The Competition and Markets Authority (CMA) in the UK has expressed opposition to the transaction due to concerns about the potential impact on competition in cloud gaming. On Friday, the CMA received a new proposal from Microsoft, described as “detailed and complex,” and extended the deadline for a final ruling to 29 August. However, the CMA stated its intention to complete the process as swiftly as possible.
The CMA previously stated that the deal would need to be restructured in order to address its concerns, and such restructuring could potentially trigger a new investigation into the merger.
In the United States, the Federal Trade Commission (FTC) raised concerns that the deal between Microsoft and Activision could negatively impact consumers, regardless of whether they played games on consoles or had subscriptions. The FTC argued that Microsoft might have the motivation to exclude competitors such as Sony Group. In response, Microsoft offered 10-year licenses to its rivals.
However, Judge Corley ruled on Tuesday that the merger complied with antitrust law and rejected the FTC’s request for a preliminary injunction. The FTC had sought the injunction to allow more time for the case to be presented before an internal FTC judge in August.
Earlier this week, an FTC representative expressed concerns that the merger presented a “distinct threat… to fair competition in cloud gaming, subscription services, and consoles.”
Following the judge’s ruling against the FTC, Bobby Kotick, the CEO of Activision Blizzard, commented, “Our merger will bring advantages to consumers and employees alike. It will foster competition instead of allowing established market leaders to maintain their dominance in our rapidly expanding industry.
