Witness the historic approval of Microsoft’s $69 billion purchase of the video game developer Activision Blizzard.
The largest merger in the history of the technology sector has just been approved. A federal judge in California rejected the Federal Trade Commission’s request for a preliminary injunction on Tuesday, thereby approving Microsoft’s $69 billion acquisition of game developer Activision Blizzard. Consider it a significant setback for FTC head Lina Khan.
Khan’t Stopper Never Stop
A brief summary of what happened The acquisition of Microsoft included a deadline for transaction closure of July 18. The FTC launched a lawsuit to stop the transaction, citing the potential monopolistic power Microsoft may have over the console gaming market if it acquired a major game developer. However, that trial isn’t set to start until August, which is why the application for a preliminary injunction was made prior to the merger deadline of July 18.
Currently, US District Judge Jacqueline Scott Corley has rejected the preliminary injunction and essentially approved the settlement, concluding that the FTC is likely to lose that August trial regardless:
- The FTC’s lawsuit revolved around the idea that Microsoft may control the console market by restricting popular Activision games, like “Call of Duty,” to its Xbox system. But now that Microsoft has promised to keep “Call of Duty” available on Sony’s Playstation and the Nintendo Switch for at least 10 years, Judge Corley can put his worries to rest.
- The Playstation CEO Jim Ryan, who was the FTC’s star witness, was also criticized by Judge Corley, who stated: “The FTC’s strong reliance on Mr. Ryan’s testimony is unpersuasive. Sony opposes the combination, and it makes sense why. Sony might suffer from the combination. but advantageous for current and future Call of Duty players.
In the end
The FTC may still appeal the ruling, but in other defeats of a similar nature, such as when it was unable to stop Meta’s acquisition of VR company Within, the agency simply went on. The merger has already received approval from the antitrust watchdog of the European Union, leaving only the UK’s Competition and Markets Authority to block the takeover after vetoing it in May. Microsoft, though, appears to be making strides in that direction as well. Following Tuesday’s decision, the business and the CMA jointly requested a litigation stay from the Competition Appeal Tribunal in order to give themselves some time to resolve any unresolved issues. In other words, Microsoft’s legal department is doing its role.
