Following the 5-day court hearing at a San Francisco court last month, Microsoft has finally won the fight to buy Activision Blizzard.
The Federal Trade Commission (FTC) attempted to block the largest-ever gaming deal, but the California judge ruled in favor of the tech giant and gave it the nod to close the acquisition.
In addition to the popular Call of Duty game franchise, Activision Blizzard owns King, the company behind Candy Crush.
Once the acquisition goes through, Microsoft will become the world’s third-largest video game company, surpassed only by League of Legends publisher Tencent and Microsoft’s gaming console rival – Sony Corp.
More About the Court Ruling at Its Implications
The courtroom battle was over whether the FTC could be allowed to temporarily block the Microsoft-Activision Blizzard deal with a preliminary injunction.
The FTC challenged Microsoft’s cloud gaming agreements associated with the acquisition, arguing that the deal would harm gamers and lead to unfair competition in the market.
Microsoft publicly committed in writing and in court that it would keep Call of Duty on Playstation at Parity with Xbox for a decade.
The tech giant also agreed with Nintendo to bring the game franchise to Switch. Several agreements were made to get Call of Duty content to different cloud gaming services.
Microsoft and Activision Blizzard have hailed the court’s ruling to allow the merger. Bobby Kotick, the CEO of Activision Blizzard, said the deal would benefit workers and consumers.
Xbox head Phil Spencer, a crucial witness in the trial, said something similar, adding that the FTC’s claims regarding cloud gaming, multi-game subscription services, and console switching “don’t reflect the realities of the gaming market.”
However, FTC spokesperson Douglas Farrar expressed the FTC’s disappointment at the court ruling, emphasizing that the merger posed a threat to open competition in cloud gaming, consoles, and subscription services. He added that the FTC was still planning its next move and would continue the fight.
Can Microsoft Go Ahead With the Acquisition Now?
Microsoft promised Activision a $3 billion breakup fee unless the deal goes through by the 18th of July. The court ruling will allow Microsoft to close the deal before the deadline, provided its battle with the UK’s Competition and Markets Authority (CMA) is resolved.
The regulator moved to block the deal in April, followed by an appeal from Microsoft against the decision. It also attempted to delay the tech giant’s draw for the court’s decision with a request between the FTC and Microsoft in the middle of the hearing.
However, the Competition Appeal Tribunal shut down the request as it would have delayed the appeal process by months. Shortly after the San Francisco court ruling, the CMA and Microsoft decided to halt their legal battle in the UK.
The deal’s future remains to be seen, but all parties are looking to find a remedy in the UK and close the deal. Though the FTC can still appeal the ruling, the chances are that it might abandon the case.
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Krishi Chowdhary
Journalist
