Judge rejects FTC injunction, Microsoft’s acquisition of Activision progresses

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A judge denied the Federal Trade Commission’s request for a preliminary injunction to block Microsoft’s $68.7 billion acquisition of Activision Blizzard. Both Microsoft and Activision have said they would abandon blockbuster mergers if Judge Jacqueline Scott Corey grants an injunction.

“The Court’s responsibilities in this case are narrow. Notwithstanding these current circumstances, pending resolution of the FTC’s administrative litigation, it is to determine whether or not the merger should be terminated,” Corey said. He wrote in the judgment. “For the reasons explained, the Court found that the FTC has not shown any likelihood of winning the argument that this particular vertical integration in this particular industry could significantly reduce competition. , documentary evidence indicates increased consumer access to Call of Duty and other Activision content. Accordingly, the motion for preliminary injunction is denied. “

Corey wrote that the acquisition should be under scrutiny because it is “said to be the largest in technology history.” She spoke about her Microsoft commitment to keeping Call of Duty on PlayStation and the deal the company has in place to bring its games and her Activision Blizzard titles to the Nintendo Switch and cloud her gaming services. I mentioned

Corey ruled that the FTC must obtain pending appeals from the Ninth Circuit Court of Appeals by 11:59 p.m. PT on July 14 to further delay the deal. bottom. If not, Microsoft and Activision will have enough time to complete the deal before the July 18th deadline.

The two companies may choose to extend the deal while they deal with attempts by UK regulators to block the merger. But the Competition and Markets Authority, which initially blocked the deal over concerns about cloud gaming, said today it was open to considering a proposal from Microsoft to meet those concerns. The CMA is the only other domestic antitrust regulator to formally challenge the Activision acquisition.

“Following today’s US court ruling, our focus has returned to the UK. While we ultimately disagree with the CMA’s concerns, we have entered into a deal to address these concerns in a manner acceptable to the UK. We’re looking at how we can change that with the ‘CMA,’ Smith said. “In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that it is in the public interest to suspend litigation in the UK, and the parties have jointly filed a competitive appeal to this effect. submitted to the court.”

Activision Blizzard CEO Bobby Kotick said: “We are optimistic that today’s ruling marks a path to full regulatory approval around the world and we look forward to working with UK regulators to We are working to address any remaining concerns and are on track to complete the merger expeditiously,” Activision Blizzard CEO Bobby Kotick said in an article. Send an email to your employees.

FTC spokesman Douglas Farrar said in a statement: “Given the clear threat this merger poses to free competition in cloud gaming, subscription services and consoles, we are disappointed with this result. “We will be announcing our next steps in the coming days.” We will continue to fight to stay competitive and protect consumers.”

The FTC filed a lawsuit last December to block the merger, and a public hearing in the administrative proceedings is scheduled for August 2. If Microsoft and Activision Blizzard fail to reach a deal by the deadline, Microsoft will pay $3 billion in penalties unless the two sides renegotiate the terms or extend the deal. As such, they hoped the court would expedite its review of the FTC’s request for an injunction.

The companies argued that if the interim injunction were granted, “the deal would effectively be blocked because the FTC’s procedures are ‘glacial’ and no substantive commerce can survive.”

Despite the CMA blocking the deal, the two companies are reportedly trying to find a workaround to complete the deal anyway and continue to operate in the UK. The FTC therefore requested an injunction in the hope that it would be able to “assess the legality of the proposed takeover” at an August public hearing before the deal closes. “Despite pending administrative lawsuits and the CMA order, press reports have begun to circulate suggesting that the defendants are seriously considering completing the proposed acquisition,” the FTC request said.

Cory made his decision after a five-day trial in June in which all sorts of interesting gaming industry secrets and emails between industry leaders were exposed to everyone. First, MachineGames’ Indiana Jones project was originally going to be a multi-platform game, but after Microsoft acquired his ZeniMax, it turns out the title has become an Xbox console exclusive.

7/11 1:08 PM ET Update: Added FTC statement.

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