Microsoft victorious over FTC lawsuit to block Activision Blizzard buy

AppleInsider

A federal judge says that the FTC has failed to prove that Microsoft's acquisition of Activision Blizzard would be anticompetitive, and because of it, the UK is now pausing its own appeal of the matter.

Microsoft and Activision Blizzard logos

San Francisco-based Judge Jacqueline Scott Corley has ruled that the US Federal Trade Commission was unlikely to be prove that the proposed acquisition or merger would "substantially lessen competition."

"In sum, the FTC has not shown a likelihood of success on its theory the merger may substantially lessen competition in the Gen 9 console market because the combined firm will have the ability and incentive to foreclose Call of Duty from PlayStation," the ruling says in part.

"To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content," write Judge Corley. "The motion for a preliminary injunction is therefore denied."

Microsoft president and vice chair Brad Smith said that his company was "grateful" to the court for its decision.

"As we've demonstrated consistently throughout this process," he said, "we are committed to working creatively and collaboratively to address regulatory concerns."

A spokesperson said the FTC was "disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles."

The FTC intends to shortly announce "our next step to continue our fight to preserve competition and protect consumers."

And, the ruling has had nearly-immediate carryover to international blocks to the deal. The UK's Competition and Markets Authority (CMA) blocked Microsoft's acquisition in April 2023. After the ruling, it has now paused its appeal process as a result of the FTC trial.

In the UK, the next steps are likely to be a list of conditions that Microsoft must meet to fulfill antitrust obligations. the UK cited cloud gaming dominance as a potential problem with the deal -- but it's not at all clear if Microsoft is in fact dominant in that relatively minor sector of gaming.

The ruling against the FTC follows the EU's conditional approval of the merger.

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22july2013

The UK is acting like a colony of America now. Congratulations, Merica.

Nikon8

that was wrong.  it should be blocked

danox

Microsoft is flushing $69 billion dollars, buying a nebulous game content company, if they were buying Unreal Engine, or Unity, that would be worthwhile, particularly Unreal Engine, buying a hollow game company were the actual talent isn’t tied to the company and usually hired on a per game basis and then let go at the end of a project, all Microsoft is getting in the end is just the game titles, but the talent is free to go anywhere to work that isn’t a good deal, the federal government unintentionally was saving Microsoft from itself.

That $69 billion acquisition is probably more than what Apple has spent in its entire history on mergers and acquisitions. In fact, it probably is three times maybe four times more. And most of the talent can just fly away because that is the nature of game development, once a particular project is over usually you’re gone.

When your competition is about to make a big mistake let them, smile and congratulate them, Tim Cook is probably smiling……

danvm

danox said:

Microsoft is flushing $69 billion dollars, buying a nebulous game content company, if they were buying Unreal Engine, or Unity, that would be worthwhile, particularly Unreal Engine, buying a hollow game company were the actual talent isn’t tied to the company and usually hired on a per game basis and then let go at the end of a project, all Microsoft is getting in the end is just the game titles, but the talent is free to go anywhere to work that isn’t a good deal, the federal government unintentionally was saving Microsoft from itself.

That $69 billion acquisition is probably more than what Apple has spent in its entire history on mergers and acquisitions. In fact, it probably is three times maybe four times more. And most of the talent can just fly away because that is the nature of game development, once a particular project is over usually you’re gone.

When your competition is about to make a big mistake let them, smile and congratulate them, Tim Cook is probably smiling……

Activision / Blizzard owns major titles like CoD, Diablo, Overwatch, World Of Warcraft and Candy Crush, so I don't think they are a "nebulous game content company", as you said.  Talent may come and go, and from what I have seen it's normal in this industry.  The point is that, if the deal is done, MS will have some big games as part of their studios, and that's exactly what they need for GamePass.  Now we'll have to wait and see how customers react and if the investment works out.  

And I don't see why Tim Cook should be smiling.  Apple is neither a game developer or publisher, and neither are in console or gaming PC market.  At the same time, Microsoft now is entering the mobile gaming market with big names, King and CoD:Mobile.  Maybe the ones smiling are Satya and Phil.  We will know in the next few years how all of this goes.

bestkeptsecret

As @danvm stated, Microsoft is getting huge games when it buys Activision. The developers are very important, but the primary focus for MS here is the IP, which it unilaterally gets. 
It may well be worth the $69B that MS is spending on this acquisition.

beowulfschmidt

MS isn't out of the woods yet.  There's still an actual trial ahead, in August, I think.  Moreover, the current head of FTC is a sometimes irrationally anti-business fanatic (with which attitude I can actually agree to a large degree), she hasn't always followed the letter of the law when making decisions like the opposition to the MS-ABK buyout.

Personally, I want the buyout to succeed mostly to get that b*st*rd Kotick out of anything to do with the company.  He won't get the one way helicopter ride that he deserves, but at least he'll be gone.  And I definitely don't think it will hurt gamers at all, Sony's fantasies aside.

FileMakerFeller

22july2013 said:

The UK is acting like a colony of America now. Congratulations, Merica.

Absurd. The UK has paused its legal process, not cancelled it, pending the outcome of the US process. There's probably some ambiguity in the UK case that they expect will be resolved by the process in the US - if the UK makes a decision assuming one state of affairs and the US decides differently, that's extra work for both courts.

Nobody has to like it, but we all need to recognise the logic behind it.