Judge Approves Microsoft-Activision Merger

The biggest merger in tech industry history just got the green light.

On Tuesday, a federal judge in California denied the Federal Trade Commission’s request for a preliminary injunction seeking to block Microsoft’s monster $69 billion deal to acquire games-maker Activision Blizzard — in effect, giving the merger the go-ahead. Mark it as a major loss for FTC chair Lina Khan.

Khan’t Stop Won’t Stop

A quick timeline of events: Microsoft’s acquisition stipulated a July 18 deadline for closing the deal. Citing the possible monopolistic power Microsoft could hold over the console gaming market by acquiring a top maker of game titles, the FTC filed suit to block the merger. But that trial isn’t scheduled to begin until August — hence the motion for a preliminary injunction ahead of the July 18 merger deadline.

Now, US District Judge Jacqueline Scott Corley has ruled the FTC is likely to lose that August trial anyway, denying the preliminary injunction and essentially approving the deal:

• Central to the FTC’s case was an argument that Microsoft could dominate the console market by keeping popular Activision titles, specifically “Call of Duty”, exclusive to its Xbox console. But Microsoft has now committed to keep “Call of Duty” on Sony’s Playstation and Nintendo Switch for at least 10 years — good enough for Judge Corley to dismiss concerns.
• Judge Corley also balked at the FTC’s star witness: Playstation CEO Jim Ryan, writing: “The FTC’s heavy reliance on Mr. Ryan’s testimony is unpersuasive. Sony opposes the merger; its opposition is understandable… [the merger is] Perhaps bad for Sony. But good for ‘Call of Duty’ gamers and future gamers.”

Next Up: The FTC may still appeal the decision — though in similar recent defeats, such as its failure to block Meta’s acquisition of VR firm Within, the agency simply moved on. The European Union’s antitrust regulator has already approved the deal as well, leaving the UK’s Competition and Markets Authority as the sole remaining regulator holding up the acquisition after vetoing the deal in May. But Microsoft seems to be making progress on that front as well. Following Tuesday’s ruling, the company and the CMA made a joint submission to the Competition Appeal Tribunal for a stay of litigation in order to carve out time to hash out any lingering concerns. Microsoft’s legal team, in other words, is really answering its call of duty.