For the time being, it seems Microsoft is well on its way to completing its acquisition of Activision Blizzard thanks to a ruling from a judge today against the Federal Trade Commission’s request for a preliminary injunction on the deal.
Judge Jacqueline Scott Corley made the ruling, according to a report by Tom Warren for The Verge, siding with the Xbox owner over the FTC. While not completely sealing the deal for Microsoft, as it still has a few more hurdles to cross, this legal battle was its most significant since it threatened to delay the deal past the July 18 deadline in the original proposal between Microsoft and Activision Blizzard.
In her decision, Judge Corley noted how Microsoft had publicly demonstrated and put in writing their commitment to bringing Call of Duty to PlayStation over the next 10 years as well as introducing the game to the Nintendo Switch, and that the FTC had not “shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition.” In fact, Judge Corley goes as far as to say that the injunction hearing showed the opposite of what the FTC claimed it would, showing that the merger would give consumers more access to Activision products.
With Microsoft now given the green light to close its deal in the U.S., it will look to win a similar battle across the pond in the U.K. The Verge has also reported that the CMA and Microsoft have agreed to negotiate following the ruling in the FTC case. The CMA has stated it is “ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in [its] Final Report.”
Related: Other companies are split on if Microsoft’s Activision Blizzard will make Xbox too strong
Following the decision, Activision Blizzard CEO Bobby Kotick sent an email to employees, celebrating the decision and also signaling a shift in focus from the U.S. to the U.K.: “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.” Both Kotick’s email and a statement of his delivered via press release claimed the merger between Microsoft and Activision Blizzard will ultimately benefit consumers.
The reason the U.K. is still so important in this merger is regulators there also moved to block the deal between the two companies, as Warren notes for The Verge that the hearing for Microsoft’s appeal on that decision will begin on July 28.
Since that date is after the July 18 deadline Microsoft and Activision Blizzard set for themselves, two possibilities seem likely: either the two parties will agree to extend the deadline now that they have such a significant victory in the U.S. legal system putting some wind in their sails, or to go about the more-complicated process of completing a merger without U.K. approval.
Whatever path Microsoft and Activision Blizzard decide to follow in the road to completing their merger, it seems clear at this point the acquisition is no longer a matter of “if,” but “when.”
Updated July 11, 11:31am CT: Updated to include new information from the CMA, the U.K.’s regulator.
