MS's Blizzard Acquisition Over the Hump... US Court Dismisses FTC Injunction Request

The plan for Microsoft (MS) to acquire Activision Blizzard, which has attracted attention as a historic 'tech mega-deal,' has overcome another hurdle.

According to the Wall Street Journal (WSJ) and others, U.S. District Judge Jacqueline Scott Corley of the California Federal Court on the 11th (local time) dismissed the U.S. Federal Trade Commission's (FTC) request for a preliminary injunction to halt MS's acquisition of Blizzard.

In her ruling, Judge Corley explained the reason for dismissal, stating, "The FTC's claim that this merger would substantially lessen competition in the console, subscription service, or cloud gaming markets has not shown likelihood," and "On the contrary, reviewing the records confirms that consumers will have greater access to Blizzard content, including 'Call of Duty.'"

[Image source=Reuters Yonhap News]

Earlier, MS announced in early last year that it would acquire Blizzard for about $69 billion based on the stock price at the time. This was expected to be the largest deal in the tech sector and hailed as the 'deal of the century' if completed. Blizzard is a developer that owns popular games such as 'Call of Duty,' 'Candy Crush,' and 'World of Warcraft.' MS initially planned to complete the acquisition by July 18.

However, the FTC filed a lawsuit at the end of last year to block the acquisition, citing concerns that MS's acquisition of Blizzard would weaken competition in the gaming market. Additionally, last month, the FTC filed a preliminary injunction request to prevent MS from proceeding with the acquisition before the administrative lawsuit. The court's dismissal of the preliminary injunction request sided with MS.

Brad Smith, MS Vice Chairman, welcomed the decision in a statement, saying, "We thank the court for its swift and thorough decision," and added, "We will work creatively and cooperatively to address the regulators' concerns." Bobby Kotick, CEO of Blizzard, expressed hope that this merger would benefit consumers and employees.

On the other hand, an FTC spokesperson called the decision "disappointing, considering the clear threat to the gaming industry," and stated, "We will announce the next steps for market competition and consumer protection within days." Separately from the dismissal, the court extended the temporary restraining order issued on the 13th of last month until 11:59 p.m. on the 14th.

WSJ assessed that "MS and Blizzard may complete the acquisition before the FTC hearing scheduled for August." Although the FTC might appeal, this is considered rare. The outlet also noted that earlier this year, the FTC's preliminary injunction request to block Meta Platforms' startup acquisition was dismissed, after which the FTC abandoned efforts to block the acquisition.

However, this does not mean all hurdles have been cleared for the final acquisition. MS must obtain approvals from the UK, the U.S., and the European Union (EU) to complete the Activision Blizzard acquisition. Previously, the EU Commission approved the acquisition after accepting MS's proposals, including amendments to licensing agreements. However, the UK Competition and Markets Authority (CMA) rejected the deal due to antitrust concerns. MS immediately appealed to the court, and the related hearing is scheduled to begin at the end of July. Vice Chairman Smith said, "Following today's U.S. court ruling, our focus returns to the UK," adding, "While we disagree with the CMA's concerns, we are seeking ways to address them in a manner acceptable to the CMA."

Meanwhile, after the news broke on the New York Stock Exchange today, Blizzard's stock price moved up by more than 10% compared to the previous session. Microsoft showed slight gains.

This content was produced with the assistance of AI translation services.