In a significant development, Microsoft has successfully navigated a major obstacle in its pursuit to acquire Activision Blizzard. A recent ruling against the Federal Trade Commission’s (FTC) request for a preliminary injunction on the deal has paved the way for Microsoft to move closer to finalizing the acquisition.
Judge Jacqueline Scott Corley, who presided over the case, sided with Microsoft, the Xbox owner, against the FTC. This legal victory is a crucial step for Microsoft, as it was a potential delay factor for the deal, which was initially set to conclude by July 18, as per the original agreement between Microsoft and Activision Blizzard.
Judge Corley’s decision was influenced by Microsoft’s demonstrated commitment to expanding the reach of Activision’s popular game, Call of Duty, to PlayStation and Nintendo Switch over the next decade. The judge noted that the FTC failed to provide compelling evidence that this specific vertical merger would substantially reduce competition in the industry. On the contrary, the hearing indicated that the merger could potentially enhance consumer access to Activision products.
While this victory doesn’t entirely seal the deal for Microsoft, it does provide the tech giant with a green light to finalize its deal in the U.S. The next challenge lies across the Atlantic, where Microsoft aims to replicate its success in the U.K.
The Verge reported that the Competition and Markets Authority (CMA) and Microsoft have agreed to negotiate following the FTC case ruling. The CMA has expressed its readiness to consider any proposals from Microsoft that would address the concerns outlined in its final report.
Following the ruling, Activision Blizzard CEO Bobby Kotick expressed optimism about the merger’s future, stating that the ruling could signal a path to full regulatory approval globally. He also mentioned the company’s readiness to work with U.K. regulators to address any remaining concerns, allowing the merger to close swiftly.
The U.K. plays a crucial role in this merger, as regulators there have also attempted to block the deal. The hearing for Microsoft’s appeal against this decision is scheduled for July 28, which is after the July 18 deadline set by Microsoft and Activision Blizzard. This situation leaves two likely scenarios: either the two parties will agree to extend the deadline, buoyed by their significant victory in the U.S., or they will navigate the more complex process of completing the merger without U.K. approval.
Regardless of the path chosen, it appears that the acquisition of Activision Blizzard by Microsoft is not a question of “if” but “when.” This merger promises to reshape the gaming industry landscape, offering consumers more access to Activision’s products and potentially strengthening Xbox’s position in the market.
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