Microsoft’s Activision deal gets green light from US judge

Microsoft has received the green light from a U.S. judge on Tuesday for its proposed acquisition of Activision Blizzard for $68.7 billion, while the UK’s watchdog said it could reconsider its decision.

As reported by Reuters, Activision shares increased by 10%, and Microsoft shares rose 64 cents to $332.47 following the news, as the United States and the United Kingdom have been the two major critiques of the acquisition since it was first announced in January 2022.

The Federal Trade Commission sued Microsoft to block the acquisition in December, arguing that it would ‘’enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.’’

Last month, the government agency asked a federal court to block the parties from finalizing the deal until it decides whether it would harm competition.

However, U.S. District Judge Jacqueline Scott Corley in San Francisco rejected the FTC’s claims that the deal would be anticompetitive.

“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 markets,” Corley wrote.

FTC is ‘disappointed’ in the decision

Following the decision, Douglas Farrar, the FTC’s Director of the Office of Public Affairs, said that the agency is “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,’’ Farrar added.

The FTC has until Friday to appeal the decision.

Microsoft to focus on the CMA’s concerns now

On Tuesday, Microsoft’s Vice Chair and President Brad Smith said they are ‘’grateful for this quick and thorough decision’’, adding that they ‘’hope other jurisdictions will continue working towards a timely resolution’’.

In another statement, Smith said that they will now focus on addressing the CMA’s competition-related concerns.

‘’While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA,’’ he said.

In a statement to The Verge, the CMA, which rejected the deal in April citing concerns related to the cloud gaming market, said they are “ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our Final Report.” 

The news comes nearly two months after the European Commission approved the controversial acquisition. Other countries that have given their green light for the deal include Saudi Arabia, Brazil, Serbia, Chile, Japan, South Africa, and Ukraine.