Microsoft-Activision deal moves closer as judge denies FTC injunction
Microsoft-Activision deal moves closer as judge denies FTC injunction

Microsoft CEO Satya Nadella arrives in a San Francisco courtroom on June 28, 2023.

Shelby Knowles | Bloomberg | Getty Images

A federal judge in San Francisco has denied the Federal Trade Commission’s motion for a preliminary injunction to prevent Microsoft from completing its acquisition of video game publisher Activision Blizzard.

However, the deal is not yet fully clear. The FTC can now appeal the decision to the Federal Court of Appeal, and the companies must find a way to address the Competition and Markets Authority’s objections.

Judge Jacqueline Scott Corley wrote in the FTC Administrative Proceedings: “This Court’s responsibility in this case is narrow. Notwithstanding the present circumstances, the Court’s role It is to determine whether the merger should be halted, or even terminated, pending the resolution of the FTC’s administrative action.” her decision, released on Tuesday. “For the reasons explained, the court held that the FTC had not shown that it was arguing that a particular vertical merger in this particular industry would have substantially lessened competition. Instead, the documented evidence indicated that Call of Duty and other Activision content. Accordingly, the motion for a preliminary injunction is denied.”

Activision Blizzard shares hit an intraday high of $88.03 per share after the U.S. District Court for the Northern District of California issued the ruling. Microsoft agreed to buy the game publisher for $95 per share.

Activision Blizzard CEO Bobby Kotick said in a statement: “Our merger will benefit consumers and workers. It will foster competition rather than allow entrenched market leaders to continue to dominate. Our fast-growing industry.”

Microsoft also welcomed the decision.

“We thank the San Francisco court for its prompt and thorough decision and hope that other jurisdictions will continue to work toward a timely resolution,” Microsoft President and Vice Chairman Brad Smith said in a statement. As evidenced, we are committed to working creatively and collaboratively to address regulatory issues.”

The decision follows five days of court hearings to assess whether Microsoft Will be able to complete $68.7 billion Activision Blizzard The company announced the acquisition in 2022.Judge A decision is being made on whether to grant the Federal Trade Commission’s emergency injunction request to prevent the deal from completing.

The FTC argues that Microsoft is interested in making certain games exclusive to prevent them from appearing on Sony’s PlayStation or Nintendo’s Switch, and it may do so if the deal goes through. But Microsoft said it wanted to make Activision Blizzard’s games more widely available, not less, in part to grow through subscriptions to its Game Pass library. Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick both testified, as did executives from Alphabet, Nvidia and Sony.

In December, the FTC filed a lawsuit seeking to block the deal and asked one of the agency’s administrative law judges to review it. But in June, before that, the Federal Trade Commission (FTC) requested a preliminary injunction preventing Microsoft from completing the acquisition, and plans to take the case to an administrative law judge on Aug. 2. The two companies hope on July 18.

“Given the clear threat this merger poses to cloud gaming, subscription services, and open competition for consoles, we are disappointed by this outcome. In the coming days, we will announce our next steps as we continue our efforts to preserve competition and protect consumers, ’ said a spokesman for the Federal Trade Commission.

Kotick said at the hearing that Activision Blizzard’s board didn’t see how the deal would proceed if the judge granted a preliminary injunction.

This is breaking news. Please check for updates.

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