Volkswacht Bodensee - Microsoft-Activision deal back on track after US court win

The US Federal Trade Commission, the Washington-based antitrust enforcer, requested that the blockbuster transaction be halted pending an investigation on competition concerns.

But Judge Jacqueline Scott Corley said "the FTC has not shown a likelihood it will prevail on its claim."

The decision handed a major victory to Microsoft and allowed it to close its purchase of Activision, the maker of Call of Duty and Candy Crush, as planned on July 18.

Xbox-owner Microsoft launched a bid for Activision Blizzard early last year, seeking to establish the world's third biggest gaming firm by revenue after China's Tencent and Japan's PlayStation maker Sony.

While the European Union has greenlit the deal, Microsoft still needs to overcome a veto from the Competition and Markets Authority (CMA) in Britain.

- 'Grateful' -

Microsoft was set for an appeal hearing in London later this month, but the company on Tuesday said it would consider further ways to satisfy the CMA.

"We stand ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns," a CMA spokesperson said.

The FTC could also continue to pursue its case, though the judge's ruling weakened the legal foundations of that prospect considerably.

"We're grateful to the Court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution," said Microsoft President Brad Smith.

"As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns," he added.

The FTC in December sued to block the transaction with Activision Blizzard over concerns that it would stifle competition.

But Judge Corley said the remedies offered by Microsoft to assuage worries about the deal were effective to provide fair competition with archrivals Sony and Nintendo as well as other computer cloud operators of video games.

Instead of showing harm to competition, "to the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content," she said.

The ruling dealt another defeat to the FTC, which is led by Lina Khan, an antitrust academic who had been an advocate of breaking up the biggest tech firms before she was nominated by President Joe Biden to the job in 2021.

In the same California court, Khan lost an attempt to stop Meta, Facebook's parent company, from acquiring Within Unlimited, a fitness app startup.

E.Schubert--BTB