Microsoft-Activision Merger Passes US Court Test, FTC Faces Appeal Scrutiny

Microsoft-Activision Merger Passes US Court Test, FTC Faces Appeal Scrutiny

Microsoft and Activision Blizzard

The closure of the momentous $69 billion Microsoft-Activision deal may occur ahead of the anticipated July 18 deadline. A US judge delivered a ruling in favor of the record-breaking acquisition on Tuesday, dismissing the Federal Trade Commission’s (FTC) call for a preliminary injunction. However, the FTC still retains the opportunity to appeal the verdict until midnight on July 14. Assuming no further legal obstacles arise, the deal is poised to be completed worldwide within a week, with the exception of the United Kingdom, which vetoed the transaction in May.

Microsoft’s motivation behind the acquisition of Activision lies in its desire to expand its presence in the mobile gaming sector, where the tech giant currently lacks a significant foothold. In contrast, Activision holds the rights to immensely popular games and their developers, including renowned titles like Candy Crush and Call of Duty. If successfully executed, this colossal deal would propel Microsoft to the third position among the world’s largest video game companies, trailing behind China’s Tencent and its game console rival, Sony.

While the deal has obtained approval from various jurisdictions, it has encountered opposition from the FTC in the United States and the Competition and Markets Authority in the UK. Activision Blizzard CEO Bobby Kotick previously informed a judge that the company was inclined to abandon the acquisition if the US Federal Trade Commission secured a ruling to pause the deal.

Government bodies opposing the merger contend that the proposed transaction would negatively impact gamers and lead to reduced competition in certain sectors. The FTC argues that such a massive merger would grant Microsoft exclusive access to Activision games, potentially leaving Nintendo and Sony Group marginalized.

Although Microsoft has already received antitrust approval from the European Union for its $69 billion acquisition bid, it faces resistance from Canada and the UK. In April, the British Competition and Markets Authority blocked the takeover, prompting Microsoft to plan an appeal later this month. The company’s request for an extension until October has been denied. Additionally, Canada’s Department of Justice recently concluded that Microsoft’s acquisition of Activision Blizzard “is likely to” result in decreased competition in certain aspects of the gaming industry.

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