Judge denies FTC injunction request in Microsoft’s proposed acquisition of Activision Blizzard [Update 2]

A federal judge in San Francisco has denied the Federal Trade Commission’s motion for a preliminary injunction to prevent Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard, allowing Microsoft to finally close the deal—if it is willing to do so around the United Kingdom or come to an agreement with its Competition and Markets Authority.

The Competition and Markets Authority in the United Kingdom moved to block the acquisition in April. Microsoft filed an appeal, and a hearing is set to begin on July 28. However, the acquisition deal has a July 18 termination date, after which Microsoft would have to pay Activision Blizzard a $3 billion termination fee.

“This Court’s responsibility in this case is narrow,” reads the conclusion of Judge Jacqueline Scott Corley’s decision. “It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action. For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, 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.”

The Federal Trade Commission can file an appeal against today’s decision, but it is unclear whether it plans to do so.

In a series of tweets, Microsoft Gaming CEO Phil Spencer said, “We’re grateful to the court for swiftly deciding in our favor. The 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.

“Since we first announced this deal, our commitment to bringing more games to more people on more devices has only grown. We’ve signed multiple agreements to make Activision Blizzard’s games, Xbox first party games and Game Pass all available to more players than they are today.

“We know that players around the world have been watching this case closely and I’m proud of our efforts to expand player access and choice throughout this journey.”

Update 07/12/23 at 7:15 p.m.: The Federal Trade Commission has filed notice that it will appeal Judge Jacqueline Scott Corley’s ruling denying the Commission’s request for a preliminary injunction.

Update 07/14/23 at 11:50 p.m.: The Ninth Circuit has denied the Federal Trade Commission’s request for a preliminary injunction, allowing Microsoft to close its deal to acquire Activision Blizzard as long as it settles its dispute with the Competition and Markets Authority.