US judge rules Microsoft deal to buy Activision can go forward

WASHINGTON (Reuters) – In a significant development, a U.S. judge has given the green light for Microsoft’s planned acquisition of Activision Blizzard, dismissing the request by antitrust enforcers for a temporary injunction to halt the $69 billion deal. This decision paves the way for the merger to proceed as planned.

However, the court has extended the temporary restraining order until July 14, 11:59 pm, to allow the Federal Trade Commission (FTC) to submit an appeal.

The FTC initially sought to block the acquisition, expressing concerns that Microsoft’s ownership of Activision would grant them exclusive access to popular games like “Call of Duty,” potentially limiting their availability on other platforms. “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,” stated FTC spokesperson Douglas Farrar.

Following the court ruling, Microsoft’s shares experienced a slight decrease, while Activision’s shares rose by 5.6%.

The FTC argued that Microsoft could use Activision’s games to sideline competitors like Nintendo and Sony Group in the console market. In response, Microsoft President Brad Smith took to Twitter, expressing gratitude for the court’s “quick and thorough” decision. He emphasized that the merger will benefit consumers and workers by promoting healthy competition and breaking the dominance of existing market leaders.

Activision Blizzard CEO, Bobby Kotick, expressed his support for the merger, stating, “Our merger will benefit consumers and workers. It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.” Microsoft, in an effort to address the FTC’s concerns, has agreed to license “Call of Duty” to rivals, including a 10-year contract with Nintendo, contingent on the merger’s completion.

The trial also shed light on the immense potential of the gaming market, which is projected to experience a 36% sales increase to $321 billion over the next four years. The focus of the trial primarily centered around the impact on “Call of Duty,” but it is important to note that Activision is responsible for other popular titles such as “World of Warcraft,” “Diablo,” and the mobile game “Candy Crush Saga.”

It is worth mentioning that Microsoft’s bid to acquire Activision Blizzard is facing opposition from Britain’s Competition and Markets Authority, which previously blocked the takeover in April. An appeal is scheduled for July 28.

(Reporting by Diane Bartz, writing by Kanishka Singh; Editing by Caitlin Webber)