Microsoft To Go Ahead And Acquire Activision Blizzard As FTC’s Injunction Request Denied

Microsoft will be allowed to proceed with its acquisition of Activision Blizzard as the FTC has failed to win an interim injunction. Essentially, a California judge has allowed Microsoft but cautioned that the allegations of antitrust haven't been scrapped.

After five days of hearing testimonies from multiple members of the top management of tech companies, Judge Jacqueline Scott Corley has denied the Federal Trade Commission's request for a preliminary injunction.

Microsoft Convinces It Can Maintain A Healthy And Competitive Ecosystem

Microsoft has been facing multiple legal hurdles from antitrust agencies in quite a few countries. The tech giant had won a reprieve in the EU but continues to face challenges in the UIS and the UK.

Previous reports had indicated that Microsoft was exploring options to close the deal despite the UK block. This forced the FTC to request an injunction.

Even the UK CMA filed to try and postpone Microsoft's appeal of its Activision Blizzard acquisition decision. The Competition Appeal Tribunal (CAT) figuratively threw out the request, as it would have pushed the appeal process from July to October. The CAT claimed such tactics are "contrary to justice and fairness."

Right after the California judge read out the decision, the CMA and Microsoft jointly agreed to pause their legal battle in the UK. Both have indicated they will try to negotiate how the Activision Blizzard deal could be modified.

At the heart of the issue is a concern that Microsoft acquiring Activision Blizzard will significantly hamper competition in the emerging cloud gaming segment. However, it appears Microsoft was able to convince Judge Corley.

Will Microsoft Be Able To Buy Activision Blizzard?

Microsoft had indicated long back that it intends to acquire Activision Blizzard in a deal valued at $68.7 billion. The company doesn't appear to be facing any financial hurdles. However, it has continually faced opposition from several rival companies such as Sony.

The legal challenges for Microsoft haven't ended but they won't stop Microsoft from acquiring Activision Blizzard. The EU agency has already given the deal the go-ahead in May. Hence Microsoft can now technically close without the UK's explicit approval, and without an injunction in the US holding it back.

The US FTC does have the provision to appeal. However, some reports suggest that the agency might not take the option presumably because the regulator didn't appeal a court's decision permitting Meta to acquire Within.

Microsoft will most likely face a lengthy antitrust investigation because the deal is widely perceived as being anti-competitive. However, this should happen after the Xbox console maker acquires Activision Blizzard.