Microsoft’s $69 Billion Buyout of Activision Blizzard Resurrected by US Federal Judge
In a significant turn of events, a US federal judge has ruled against the temporary suspension of Microsoft’s proposed $69 billion acquisition of video gaming giant Activision Blizzard. The decision comes after the US Federal Trade Commission (FTC) requested a halt to the deal due to concerns regarding competition. However, Judge Jacqueline Scott Corley concluded that the FTC had not provided sufficient evidence to demonstrate a likelihood of prevailing in its claim.
The ruling represents a major victory for Microsoft, allowing the company to proceed with its purchase of Activision as planned on July 18. The acquisition aims to position Microsoft as the world’s third-largest gaming firm by revenue, trailing behind China’s Tencent and Japan’s PlayStation maker Sony.
While the European Union has already given its approval for the deal, Microsoft still faces a potential obstacle in the form of a veto from the Competition and Markets Authority (CMA) in Britain. The company was scheduled for an appeal hearing in London later this month, but Microsoft has expressed its willingness to explore alternative approaches to address the concerns raised by the CMA.
The FTC, despite the setback caused by the judge’s ruling, retains the option to continue its pursuit of the case. However, the judge’s decision has significantly weakened the FTC’s legal footing in its efforts.
Microsoft’s President, Brad Smith, expressed gratitude to the court for its prompt and thorough decision. He also emphasized Microsoft’s commitment to working collaboratively to address regulatory concerns, as demonstrated throughout the acquisition process.
Judge Corley acknowledged the remedies offered by Microsoft to alleviate concerns about the deal, noting their effectiveness in promoting fair competition with rivals such as Sony and Nintendo, as well as other cloud-based operators in the video game industry. Contrary to the FTC’s claims, the evidence presented during the proceedings indicated that the acquisition would result in increased consumer access to Activision’s content, including popular titles like Call of Duty.
The ruling delivers another blow to the FTC, headed by Lina Khan, an antitrust academic and advocate for breaking up major tech companies. Khan’s nomination by President Joe Biden in 2021 signaled a shift towards more aggressive antitrust enforcement. However, her attempts to block Meta (formerly Facebook) from acquiring fitness app startup Within Unlimited also failed in the same California court.
The future of Microsoft’s acquisition of Activision Blizzard now appears more certain, pending resolution of the CMA’s concerns in Britain. The deal holds significant implications for the gaming industry and sets the stage for Microsoft to further strengthen its position in the global gaming market.
