FTC’s case against Microsoft’s Activision Blizzard deal recently ended with a ruling against the agency. While FTC’s next step was a matter of curiosity, the agency didn’t make anyone wait long for it and appealed the court’s ruling while the verdict was still piping hot.
In her ruling in favor of Microsoft, Judge Jacqueline Scott Corley stated:
“Microsoft’s acquisition of Activision has been described as the largest in tech history. It deserves scrutiny. That scrutiny has paid off: Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox. It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements to, for the first time, bring Activision’s content to several cloud gaming services. This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action. For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore denied.”
The FTC’s appeal is an attempt to obtain a preliminary injunction to halt the merger between Activision Blizzard and Xbox before the scheduled trial in August. As of now, the deal’s completion is set for July 18.
In the event that the merger fails to be finalized by the specified date, Xbox (Microsoft) will be obligated to pay Activision Blizzard a sum of $3 billion, and the terms of the merger may be renegotiated. Although FTC has other options besides the appeal, various analysts predict the deal will ultimately be completed.
Reacting to the appeal, Microsoft’s president Brad Smith said:
“The District Court’s ruling makes crystal clear that this acquisition is good for both competition and consumers. We’re disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward.”
Previously, FTC expressed disappointment in the court’s decision and indicated that it would resort to other legal options to halt the deal. On the other hand, FTC is not the only player in the story that resorts to appeals. Microsoft also appealed UK’s Competition and Markets Authority’s decision to halt the deal.
Microsoft’s attempt to buy Activision Blizzard is the largest in the tech industry, with its $68.7 billion price tag, and the company will become the owner of various franchises, which are basically golden geese, including Call of Duty and World of Warcraft.
