Microsoft wins FTC trial, can proceed with Activision Blizzard merger

With the FTC's preliminary injunction denied, Microsoft can close its deal for Activision Blizzard before its deadline hits next week.

Following its week-long trial against the FTC, Microsoft has been allowed to continue its acquisition of Activision Blizzard. California judge Jacqueline Scott Corley ruled in favor of the Xbox maker, saying the US regulator "has not shown a likelihood it will prevail on its claim this particular vertical merger...may substantially lessen competition."

Corley highlighted Microsoft's repeated comments saying it wouldn't lock off Activision Blizzard franchises to Xbox, adding that it committed "in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox. [...] It entered several agreements to for the first time bring Activision’s content to several cloud gaming services.

"To the contrary," she concluded, "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."

Following the verdict, Xbox head Phil Spencer said the company's evidence "showed the Activision Blizzard deal is good for the industry and the FTC’s claims about console switching, multi-game subscription services, and cloud don’t reflect the realities of the gaming market. [...] 

I’m proud of our efforts to expand player access and choice throughout this journey," he concluded. 

Meanwhile, Activision Blizzard CEO Bobby Kotick reiterated in a statement that the merger will "enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.” 

What's next for Microsoft after its FTC trial

Microsoft has one full week to wrap up its acquisition of Activision Blizzard before its July 18 deadline. Though it's now allowed to wrap things up here in the US, things aren't quite done yet. 

Its biggest obstacle is currently the UK's Competition and Markets Authority (CMA). Like the FTC, the CMA has been very much against this merger, and worked hard to stop it from going forward. As a result of an interim ban from May, Microsoft and Activision Blizzard can't acquire one another without express CMA permission. 

Currently, both companies are working to appeal the original block from the CMA, which is set to take place from July 28 to August 4. Kotick noted in his statement the two would "work with UK regulators to address any remaining concerns so our merger can quickly close."

Microsoft may not be fully done with the FTC, either. It still has to contend with the FTC's antitrust injunction that was filed back in June ahead of this trial. 

Speaking to Bloomberg, a spokesman for the regulator also indicated it would continue to move against Microsoft. "In the coming days," they said, "we’ll be announcing our next step to continue our fight to preserve competition and protect consumers." 

The FTC has until 11:59 PM PT on July 14th to appeal Corley's decision. 

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