Monday, December 4, 2023

Microsoft wins lawsuit against the FTC for the purchase of Activision Blizzard

good news for Microsoft. Judge Jacqueline Corley ruled in favor of Redmond following the recent five-day hearing in which the FTC attempted to block the purchase of Activision Blizzard. In this way, the company will be able to move forward with the acquisition valued at 69,000 million dollars.

The magistrate’s ruling has denied the preliminary precautionary measure that the Federal Trade Commission was promoting to veto the agreement. This means that Microsoft now has a clear path to close the purchase of Activision Blizzard in the United States before the target date of July 18. However, has yet to figure out what happens in the UK.

In her decision, the judge explained that Microsoft has given ample evidence of its commitment to maintain call of duty on PlayStation and bringing it to more platforms, like the Switch. And while he acknowledges that the scrutiny over the Activision Blizzard purchase is logical and deserved given its magnitude, also exposes the FTC’s lack of convincing evidence to block it.

“(…) the Court finds that the FTC has failed to demonstrate the likelihood of prevailing in its claim that this particular vertical merger in this specific industry may substantially reduce competition. To the contrary, the record evidence points to a increased consumer access to Call of Duty and other Activision content. Therefore, the motion for injunctive relief is DENIED.”

Excerpt from Judge Corley’s ruling.

Microsoft may close the purchase of Activision Blizzard in the United States

The main executives of Microsoft and Activision Blizzard have not been slow to celebrate the ruling in their favor. Brad Smith, president of the Redmond firm, posted a brief statement via Twitter thanking the San Francisco Court. “As we have consistently demonstrated throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns,” he said.

For his part, Phil Spencer, leader of Xbox, also welcomed Judge Corley’s determination. “The evidence showed that the Activision Blizzard settlement is good for the industry and that the FTC’s assertions about console switching, multi-game subscription services and the cloud do not reflect the realities of the gaming market.” tweeted.

Bobby Kotick, CEO of Activision Blizzard, was another who did not miss the opportunity to celebrate the ruling. And he even threw an implicit dart at Sony, the main opponent of the acquisition. “Our merger will benefit consumers and workers. It will make competition possible instead of allowing entrenched market leaders to continue to dominate our rapidly growing industry,” he said.

On the opposite sidewalk, the FTC’s reaction has been as expected. douglas farrara spokesman for the Federal Trade Commission, told Bloomberg their dissatisfaction with the ruling. And his words seem to imply that the body does not intend to give up easily.

“We are disappointed with this result given the clear threat this merger poses to open up competition in cloud gaming, subscription services and consoles. In the coming days we will be announcing our next step to continue our fight to preserve competition. and protect consumers.

FTC statement.

The FTC can appeal the Court’s ruling that prevents the blocking of the purchase of Activision Blizzard. You have until next Friday, July 14 at 11:59 p.m. Pacific Time. In any case, it is still unknown if the body chaired by Lina Khan will really launch down that path.

What’s next for Microsoft

Phil Spencer, director of Microsoft Gaming, wants an Xbox appstore on mobile

Having defeated the FTC in court, Microsoft has achieved the go-ahead in two of the three territories that were presented as keys to moving forward with the purchase of Activision Blizzard. The Redmonds had already received a thumbs up from the European Commission and now they can close the deal in the United States. However, as we mentioned previously, it still remains to be resolved what will happen in the UK.

The CMA has vetoed the acquisition as it is considered anti-competitive. Microsoft has appealed the ruling and the corresponding hearing is expected to start at the end of this month. If the parties fail to reach an agreement, there is speculation that the Americans will close the Activision Blizzard studios and offices in British territory; a measure that would not affect access to the games by the public.

Of course, beyond the regulatory, It will also be important to see how business progresses between Microsoft, Activision Blizzard and other partners.. Negotiations with PlayStation for the future of call of duty they will surely be the most juicy; without forgetting the promise to carry the shooter war to the Nintendo Switch and multiple cloud services. But that’s not all, since those from Redmond also aim to land forcefully in the world of mobile games.

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