Microsoft-Activision deal moves closer as judge denies FTC injunction request

https://www.cnbc.com/2023/07/11/microsoft-activision-deal-moves-closer-as-judge-denies-ftc-injunction.html

A federal judge in San Francisco has denied the Federal Trade Commission’s motion for a preliminary injunction to stop Microsoft from completing acquisition of video game publisher Activision Blizzard.

“This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action,” Judge Jacqueline Scott Corley wrote in her decision, published on Tuesday. “For the reasons explained, 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 motion for a preliminary injunction is therefore DENIED.”

The decision comes after five days of court hearings to assess whether Microsoft

would be able to complete the $68.7 billion Activision Blizzard

acquisition it announced in 2022. The judge was deciding whether to grant the FTC’s request for an emergency injunction to prevent the deal from closing.

The FTC argued Microsoft has shown an interest in making some games exclusive, to prevent them from appearing on Sony’s PlayStation or Nintendo’s Switch, and might do that if the deal were to close, while Microsoft said they would want to make Activision’s title more available, not less, partly to grow from people subscribing to its Game Pass library of games. Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick both testified, as did executives from Alphabet, Nvidia and Sony.

In December the Federal Trade Commission filed suit to block the deal and have an administrative law judge at the agency assess it. But in June, before that could happen, the FTC requested a preliminary injunction to prevent Microsoft from completing the acquisition, with an eye toward bringing the case to its administrative law judge on Aug. 2. The two companies were looking to close the deal by July 18.

Kotick said during the hearings that the Activision Blizzard board didn’t see how the deal could continue if the judge were to grant the preliminary injunction.