Microsoft Wins its US Court Case Over its Activision Blizzard Acquisition

Microsoft has won its trial against the US Federal Trade Commission over its Activision Blizzard deal. Today, Judge Corley denied the FTC’s request to block the deal, though the FTC could still appeal the decision.

In the decision, Judge Corley explained that the FTC failed to prove that Microsoft’s acquisition of Activision Blizzard could harm competition. “The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming market,” the judge wrote.

Judge Corley also acknowledged today that Microsoft’s recent deals with Nvidia, Nintendo, and other companies will actually expand access to Activision Blizzard games instead of making them Xbox/PC exclusive. And ultimately, that’s why it doesn’t make sense to halt a merger that is going to benefit consumers.

“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,” the judge’s decision reads.

Brad Smith, Microsoft Vice Chair and President posted the following message in reaction to the court’s decision:

We’re grateful to the Court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution. As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.

While this is very good news for Microsoft, the FTC may still want to appeal this decision, which could very much add even more complications to an already difficult and uncertain acquisition process. “We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles. In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers,” FTC spokesman Douglas Farrar said in an email shared with Bloomberg.

If Microsoft’s fight with the FTC is almost over, the company is still going through an appeal process with the UK’s Competition and Markets Authority, which chose to block the deal over concerns in the cloud gaming market. Anyway, it will be interesting to see if the CMA ultimately changes its stance after Microsoft won its case against the FTC in the US.