Microsoft wins against FTC: What it means for Activision acquisition
Microsoft's proposed acquisition of Activision Blizzard received a massive boost after a California judge dismissed the Federal Trade Commission's (FTC) plea to block the deal. The $68.7 billion worth deal will be the largest in the tech industry. The ruling could change the dynamics of FTC's antitrust case against Microsoft. Let's see what Microsoft's win in the court means for the acquisition.
Why does this story matter?
The Microsoft-Activision merger has been in limbo since the tech giant announced the acquisition at the beginning of last year. The deal has faced scrutiny all over the world but the FTC has been one of its loudest opponents. The company would be hoping its win against FTC would clear concerns of other competition watchdogs, including the UK's Competition and Markets Authority (CMA).
Court held that FTC failed to prove its case
The FTC had approached the US District Court for Northern California seeking a temporary restraining order and a preliminary injunction. The agency sought to block Microsoft and Activision from completing the deal before the July 18 deadline. After five grueling days, the court held that FTC failed to prove Microsoft's acquisition of the videogame maker would reduce competition and harm consumers.
UK's CMA paused legal battle after court's decision
The door has opened for Microsoft to complete the deal before the deadline. However, it will need to address the block in the UK. The company received some good news in that regard soon after Judge Jacqueline Scot Corley decided in its favor. The CMA and Microsoft agreed to pause their legal battle to negotiate how to address CMA's cloud gaming concerns.
Judge Corley sided with Microsoft's evidence
Microsoft has committed "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," said Judge Corley. "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."
Microsoft can technically close the deal now
With the European regulator's approval under the belt, Microsoft can technically close the deal now. It is now even easier for the tech giant with the FTC's injunction attempt failing. To avoid a complicated situation in the UK, the CMA has also come to the table to talk with Microsoft regarding other concerns. It needs to be seen what the FTC does next.
FTC may not appeal the court's decision
FTC can appeal the court's decision, but it may not. It didn't go through the appeal process when a court permitted Meta to acquire the VR company Within. If the decision stands as it is, this would be FTC's second major loss. It is a significant blow to FTC chair Lina Khan's crusade against Big Tech. Her detractors have already become quite loud.
