Update: In a rapidly developing update in this snowballing story, Microsoft president Brad Smith has revealed that his company have agreed to a “stay of litigation” with UK regulator, the CMA. An appeal hearing with the CAT had been scheduled to get underway on 28th July, but it sounds like the two parties will now return to the table in an attempt to hammer out some kind of compromise.
Smith said: “After today’s court decision in the US, our focus now turns back to the UK. 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 added: “In order to prioritise work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of the litigation in the UK would be in the public interest and the parties have made a joint submission to the Competition Appeal Tribunal to this effect.”
Original Article: The seemingly never-ending saga involving Microsoft’s proposed $69 billion buyout of Activision Blizzard has taken another twist today, as the trillion dollar titan has overcome US regulator the Federal Trade Commission in court, after the antitrust organisation had sought a preliminary injunction to prevent the acquisition from closing.
Over five days of testimony, Judge Jacqueline Scott Corley listened to arguments from both Microsoft and the FTC, and ultimately ruled in favour of allowing the Redmond firm to complete the deal ahead of its 18th July deadline. However, Microsoft still faces significant hurdles in the UK, where the Competition and Markets Authority has blocked the deal.
A statement from Judge Corley said:
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. 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.
Meanwhile, Xbox boss Phil Spencer commented on Twitter that the “evidence showed the Activision Blizzard deal is good for the industry”. He added that Microsoft’s commitment to “bringing more games to more people on more devices has only grown”:
The Xbox maker will now need to determine whether it closes the deal without the CMA’s permission or if it can negotiate some form of remedy with the British regulator. Microsoft has appealed to the Competition Appeal Tribunal in a bid to get the CMA to reconsider, and a hearing will get underway on 28th July – after the aforementioned deadline.
The FTC does have three days to appeal the above decision, but commentators have noted it didn’t exercise that right when it attempted to block Meta’s acquisition of VR developer Within. There’s still a lot of mileage left in this story, then, but with the FTC faltering and the European Commission already giving the deal the greenlight, a lot of pressure is now being placed on the UK’s regulator.