A federal judge has handed down a landslide victory to Microsoft for refusing to block its looming bid for $69 billion video game company Activision Blizzard. Regulators called for the deal to be scrapped as it hurts competition.
U.S. District Judge Jacqueline Scott Corey said in her ruling that the Federal Trade Commission, which enforces antitrust laws, has not shown a chance of winning if the case goes to court.
“The FTC has not raised any serious questions as to whether the proposed merger could significantly reduce competition in the console, library subscription services, or cloud gaming markets,” Corey said. wrote.
Microsoft appeared to have the upper hand in the five-day San Francisco court hearing that ended late last month. The meeting included testimony from Microsoft CEO Satya Nadella and Activision Blizzard’s longtime CEO Bobby Kotick, both of whom worked on Activision’s hit game Call of Duty. will continue to be available to those who play on consoles that compete with Microsoft’s Xbox, especially Sony’s PlayStation.
“Our merger will benefit consumers and workers, allowing competition rather than allowing entrenched market leaders to continue to dominate a rapidly growing industry,” Kotik said in a written statement after the judgment on Tuesday. It’s something to do,’ he said.
The FTC had asked Corey to issue an injunction temporarily blocking the closing of the deal between Microsoft and Activision before an FTC internal judge reviewed the case in August.
The companies have suggested that such a delay would effectively force them to scrap the deal they signed about 18 months ago. Microsoft promised to pay Activision $3 billion in penalties if the deal wasn’t completed by July 18.
The case has come under fire against the tech industry under Commissioner Lina Khan, who was inaugurated by President Joe Biden in 2021, citing her tough stance on what she sees as monopolistic practices by tech giants such as Amazon, Google, and Amazon. It was an important touchstone for increased FTC oversight. Facebook parent meta.
Another judge earlier this year rejected the FTC’s attempt to block Meta’s acquisition of virtual reality fitness company Within Unlimited.
During the proceedings, Corey, himself a Biden nominee, has raised concerns about the FTC’s lawsuits, especially if Microsoft removes Call of Duty from competing platforms or offers a substandard experience on competing consoles. expressed skepticism about damages.
“In the end, it all comes down to Call of Duty,” she said. “We are here because of Call of Duty.”
Corey said the merger deserves scrutiny.
“That scrutiny paid off. Microsoft has promised in writing, publicly and in court that it will keep Call of Duty on PlayStation for 10 years on par with Xbox,” she wrote. “The company has made an agreement with Nintendo to bring Call of Duty to Switch, and has also made several agreements to bring Activision content to several cloud gaming services for the first time.”
Amid mounting antitrust investigations and legal challenges in the U.S. and around the world, Microsoft has promised Call of Duty will appear on Nintendo Switch consoles, Nvidia’s cloud gaming service and other platforms for at least a decade.
“In many ways, you won,” Corley told FTC chief prosecutor James Weingarten, who handled the case.
“I don’t think we won,” Weingarten said, adding that there was no evidence that a “hurriedly agreed” deal would adequately protect the market.
Following the ruling, Activision Blizzard’s stock jumped more than 11% on Tuesday, hitting a year high.
Many other countries and the European Union have approved the acquisition of Activision Blizzard, but it still faces opposition from the UK Competition and Markets Authority. The company had planned to appeal the decision at a court hearing scheduled for later this month, but the FTC ruling appears to have forced it to reconsider.
The Competition and Markets Authority and Microsoft said they jointly applied to stay the hearing, arguing that it is in the public interest to “stop litigation” while they consider how to resolve their differences in order to move forward with the deal.
In a prepared statement, the CMA said it was “ready to consider proposals from Microsoft to restructure the deal in a way that addresses the concerns” outlined in the merger decision.
Microsoft has now said its focus is back on the UK, saying, “Ultimately we disagree with the CMA’s concerns, but will consider how the deal could be amended to address the concerns in a way that the CMA can accept. We do,” said President Brad Smith. said in a statement.
Canadian regulators are also investigating the deal, according to a letter filed with Microsoft in the U.S. lawsuit late last month, which it said could “lead to the prevention or mitigation of competition in consoles, subscription services and cloud-based gaming.” It is highly likely,” he concluded.
https://abc7chicago.com/microsoft-federal-trade-comission-ruling-activision-blizzard-acquisition/13489866/ Judge rules that Microsoft may proceed with acquisition of Activision Blizzard for record $69 billion