US Judge Rules Microsoft Acquisition Deal for Activision Can Go Forward

WASHINGTON: A U.S. judge on Tuesday ruled that Microsoft may go ahead with its planned acquisition of video game maker Activision Blizzard, with antitrust laws to temporarily halt the $69 billion deal. The bailiff’s request for a preliminary injunction was denied.

Separately, the court extended the temporary injunction until 11:59 p.m. on July 14 to allow the Federal Trade Commission’s appeal.

The FTC had originally asked a judge to drop the proposal, saying it would give Microsoft, the maker of the Xbox gaming console, exclusive access to Activision’s games, including the best-selling “Call of Duty.” The agency’s concern was that the deal could make these video games unavailable on other platforms.

“This outcome is disappointing given the clear threat this merger poses to free competition in cloud gaming, subscription services and consoles. We will be announcing our next steps in the coming days,” FTC spokesman Douglas Farrar said.

Microsoft shares fell slightly, while Activision shares rose 5.6%.

In its arguments, the FTC said that Microsoft’s use of Activision games could put rival console makers such as Nintendo and market leader Sony Group in a bind.

Microsoft President Brad Smith tweeted that he was “grateful” for the company’s “quick and thorough” decision.

“Our merger will benefit consumers and workers alike, as it creates a rapidly growing industry dominated by entrenched market leaders,” Activision Blizzard CEO Bobby Kotick said in a statement. It will allow competition instead of allowing it to continue.” To address the FTC’s concerns, Microsoft has agreed to license “Call of Duty” to competitors, including a 10-year deal with Nintendo, contingent on the completion of the merger. Microsoft CEO Satya Nadella argued in June that the company had no incentive to shut out Sony’s PlayStation or other rivals in order to sell more of its Xbox consoles. According to PwC estimates, it will grow to $321 billion over the next four years. While much of the testimony at recent trials has focused on “Call of Duty,” Activision has produced other bestsellers such as “World of Warcraft.” Microsoft’s effort to buy the video game maker has also faced opposition from the UK Competition and Markets Authority, which blocked the deal in April. An appeal is scheduled for July 28.