Microsoft FTC Battle, Gets Closer to Activision Blizzard Acquisition

Author

Moin Khot

Date

Jul, 12.2023

In a significant win for Microsoft, the tech giant has successfully overcome a major obstacle in its quest to acquire gaming powerhouse Activision Blizzard. The recent ruling by Judge Jacqueline Scott Corley against the Federal Trade Commission's (FTC) request for a preliminary injunction has cleared the path for Microsoft to finalize the acquisition.

U.K. Approval Remains Key Challenge For Microsoft to Acquire Activision Blizzard 

The ruling serves as a crucial step forward for Microsoft, allowing the company to proceed with its plans to acquire Activision Blizzard by the original agreement deadline of July 18. Judge Corley's decision was influenced by Microsoft's commitment to expanding the reach of Activision's flagship game, Call of Duty, to popular gaming consoles such as PlayStation and Nintendo Switch over the next decade. The judge found the FTC's evidence of potential competition reduction in the industry to be lacking, instead acknowledging the potential for increased consumer access to Activision's products as a result of the merger.

While this victory represents significant progress, Microsoft still faces a key challenge on the horizon—the acquisition's approval in the United Kingdom. The Competition and Markets Authority (CMA) and Microsoft have agreed to engage in negotiations following the FTC ruling. The CMA has expressed its willingness to consider proposals from Microsoft aimed at addressing any concerns outlined in their final report.

Activision Blizzard CEO Bobby Kotick has expressed optimism about the future of the merger, viewing the ruling as a potential signal for full regulatory approval globally. Kotick also conveyed the company's readiness to collaborate with U.K. regulators to address any remaining concerns, enabling a swift closing of the merger.

The U.K.'s role in this acquisition is crucial, as regulators there have also raised objections to the deal. The scheduled hearing for Microsoft's appeal against the U.K. decision falls on July 28, after the initial deadline set by Microsoft and Activision Blizzard. This situation presents two likely scenarios: an agreement to extend the deadline, buoyed by the positive ruling in the U.S., or navigating the more complex process of completing the merger without U.K. approval.

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Irrespective of the chosen path, it is evident that the acquisition of Activision Blizzard by Microsoft is no longer a matter of "if" but "when." This groundbreaking merger is poised to reshape the gaming industry landscape, offering gamers enhanced access to a vast array of compelling titles and potentially opening new avenues for innovation.