Federal Judge Rejects FTC Effort To Halt Microsoft-Activision Merger

A federal judge has rejected the Federal Trade Commission’s effort to stop Microsoft’s acquisition of Activision, ruling that the government had not shown that the transaction would substantially lessen competition.

“The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets,” U.S. District Judge Jacqueline Scott Corley wrote in her opinion (read it here).

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Microsoft/Activision: EU Goes Against The Grain By Waving Through $69B Takeover

The FTC launched an administrative action to block the $69 billion deal in December, arguing that the vertical merger would give Microsft too much control over top videogame franchises.

The judge’s decision was to deny a preliminary injunction pending completion of FTC administrative action. Douglas Farrar, spokesperson for the agency, said in a statement, “We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles. In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers.”

The transaction also faces opposition from the UK’s Competition and Markets Authority.

Phil Spencer, the CEO of Microsoft Gaming, said in a statement, “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.”

The FTC had sought the injunction to halt the merger before a July 18 termination date.

More to come.

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