As expected, a federal judge has sided with Microsoft in its battle to complete its $69 billion acquisition of Activision Blizzard. In a ruling handed down Tuesday, U.S. District Judge Jacqueline Scott Corley denied the Federal Trade Commission’s request to temporarily block the deal based on concerns it would harm competition in video game libraries and cloud gaming markets.
Essentially, the ruling means that the FTC’s attempt to halt the deal could cost Microsoft enormous sums in financial penalties. It would also require the company to bring back a revamped version of its offer to the U.K.’s Competition and Markets Authority for further review.
The ruling is a significant victory for Microsoft, which has faced a series of setbacks since the acquisition was announced last year. It will help clear the way for the completion of the deal, which would transform it into one of the largest gaming companies in the world. It would have significant implications for the future of Xbox, which could see the company move away from a focus on console sales to a model built around subscriptions to its library of games.
Corley noted that the deal deserved scrutiny, but it didn’t meet the threshold of harm required to warrant blocking it. In a 76-page opinion, she said that the FTC failed to show that Microsoft’s ownership of Activision would significantly hurt gamers, and that it wouldn’t win if it took the case to trial.
She specifically rejected the argument that Microsoft would have incentives to make popular titles such as Call of Duty exclusive to Xbox, withhold it from Sony’s PlayStation or degrade its quality on those systems. She also cited the fact that Microsoft has already signed agreements with other companies, including Nintendo, to allow those games on their platforms.
Corley did note that the court had jurisdiction to decide whether to extend a temporary ban on the merger. However, it would have to get a stay from the Ninth Circuit Court of Appeals before that could happen. It isn’t clear how much chance the appeal has of succeeding, but it is an important step for the FTC in its efforts to block the deal.
Shacknews will continue to follow developments as they unfold. The latest is that the FTC has filed an appeal of a recent decision to temporarily block Microsoft’s Activision acquisition. The FTC is seeking to have that temporary restraining order extended by the end of Friday.
The decision will have a significant impact on Microsoft’s plan to acquire the maker of Call of Duty and other hit titles. The company needs to persuade regulators across the globe that its plans will not lead to monopoly power in the gaming industry.
The biggest remaining roadblock to the deal is the European Union’s antitrust regulator, which hasn’t yet ruled on it. It could impose a lengthy delay if it blocks the transaction, though its decision is not due until late next month.