Microsoft-Activision Deal Allowed to Proceed, Rules Judge

A federal judge in San Francisco rejected the Federal Trade Commission’s (FTC) request for a preliminary injunction to block Microsoft’s acquisition of video game publisher Activision Blizzard.

While this brings the tech giant one step closer to finalizing the deal, it is still subject to potential appeal and ongoing scrutiny from the United Kingdom’s Competition and Markets Authority, reports CNBC.

Judge Jacqueline Scott Corley, in her decision released on Tuesday, noted that the FTC failed to prove a likely success in its claim that this merger might substantially lessen competition. She cited that the evidence points to increased consumer access to Activision content. Consequently, the request for a preliminary injunction was denied.

The decision led Activision Blizzard shares to reach a session and 52-week high of $92.91 per share, close to the $95 per share Microsoft had agreed to pay.

Activision Blizzard CEO Bobby Kotick and Microsoft’s president and vice chair, Brad Smith, both expressed optimism about this development. Smith stated they are “committed to working creatively and collaboratively to address regulatory concerns.”

Smith says its efforts now “turns back to the UK,” in a statement on Tuesday.

The ruling follows five days of court hearings to determine whether Microsoft could complete the $68.7 billion Activision Blizzard acquisition announced in 2022. The FTC had argued that Microsoft might make some games exclusive, thereby restricting them from appearing on Sony’s PlayStation or Nintendo’s Switch. Microsoft countered that they aim to make Activision’s titles more widely available to increase subscribers to its Game Pass library of games.

Despite the setback, the FTC announced it would continue fighting to preserve competition and protect consumers. Meanwhile, Microsoft and Activision have agreed to work on modifications to address the UK regulator’s concerns and have submitted a joint proposal to stay litigation in the UK to prioritize these efforts.

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