Microsoft has gained significant ground after a federal judge decided not to halt the company’s impending $69 billion acquisition of Activision Blizzard.
Regulators argued that the acquisition would harm competition and sought to block it.
The Federal Trade Commission, which upholds antitrust laws, has not demonstrated a likelihood that it would succeed if it took the matter to trial, according to District Judge Jacqueline Scott Corley’s judgment.
The possibility that the planned merger will significantly diminish competition in the console, library subscription service, or cloud gaming industries has not been seriously questioned by the FTC, according to Corley.
In a five-day court trial that culminated late last month in San Francisco, Microsoft seemed to be winning.
The proceedings featured testimony from Microsoft CEO Satya Nadella and longtime Activision Blizzard CEO Bobby Kotick, who both vowed to maintain access to Activision’s popular game Call of Duty for users of consoles that compete with Microsoft’s Xbox, particularly Sony’s PlayStation.
“Consumers and employees will gain from our merger. It would encourage competition rather than permit firmly established market leaders to maintain their dominance over our quickly expanding industry, Kotick said in a written statement following the decision on Tuesday.
Before the FTC’s internal judge could assess the deal, the FTC had urged Corley to grant an injunction temporarily preventing Microsoft and Activision from closing it.
Both businesses claimed that if there was a delay, they would be forced to break the takeover deal they agreed to nearly 18 months ago. If the transaction doesn’t close by July 18, Microsoft has pledged to pay Activision a $3 billion breakup fee.
The case served as a crucial litmus test for the FTC’s increased scrutiny of the tech sector under Chairperson Lina Khan, who was appointed by President Joe Biden in 2021 due to her firm stance against what she views as monopolistic behavior by tech giants like Amazon, Google, and Facebook parent Meta.
The FTC attempted to ban Meta from acquiring the virtual reality fitness business Within Unlimited earlier this year, but a different judge rejected their request.