Microsoft has been trying to buy Activision Blizzard since January 18th 2022. But the FTC has had a few things to say about it. Namely that the merger would harm cross-platform cloud systems and be a detriment to consoles. Largely on the fate of popular FPS “Call of Duty.” Considering that Xbox is Microsoft‘s own console, the merger could mean games that were once available across platforms could be exclusive to Xbox and its cloud service. The FTC filed an injunction, keeping Microsoft in legal limbo since.
In a shocking turn of events, Judge Jacqueline Scott Corley has ruled in favor of Microsoft.
“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,” Corley said in her ruling. “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.”
FTC Isn’t Throwing In The Towel
Despite the ruling, the FTC isn’t finished. They do have the opportunity to appeal Corley’s decision on the 14th of July. There’s also the matter of the UK regulator and the CMA (Competition and Markets Authority). Who put a block on Microsoft’s acquisition in April for similar reasons to the FTC. But Microsoft is looking for a means of circumventing the block altogether. Which, incidentally, is what pushed the FTC to file an injunction in the first place.
Both the CMA and Microsoft have amicably put their legal battle on hold to try and negotiate a way forward concerning cloud systems. Apparently European regulators have given the go-ahead. Hence Microsoft’s ability to simply go around the CMA. It’s a sticky wicket to be sure, and it seems like all parties will have to navigate it carefully. If everything goes well, Microsoft’s merger can go ahead on July 18th.