Microsoft scores big as federal court denies FTC’s preliminary injunction in Activision deal

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Microsoft won the legal battle against the Federal Trade Commission’s (FTC) preliminary injunction against its $69 billion acquisition of gaming giant Activision Blizzard. With this win, the company can move forward with its acquisition of Activision.

While the larger case is still underway, the current win has raised hope for the company. The injunction was believed to be a midway step to prevent the acquisition between the ongoing case, as FTC believe the lawsuit would be meaningless if the deal is already done.

Showing his appreciation, Xbox head Phil Spencer said, “We’re grateful to the court for swiftly deciding in our favour. The evidence showed the Activision Blizzard deal is good for the industry, and the FTC’s claims about console switching, multi-game subscription services, and cloud don’t reflect the realities of the gaming market.”

Spencer added that the company is committed to bringing more games to more people on more devices. Activision games will be available on game pass day one after the deal.

The final ruling was provided by federal judge Jacqueline Scott Corley who denied the request to stop the deal before its deadline for completion on July 18. “Microsoft’s acquisition of Activision has been described as the largest in tech history. It deserves scrutiny. That scrutiny has paid off: Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for ten years on parity with Xbox,” Corley said.

“After considering the parties’ voluminous pre-and-post hearing writing submissions, and having held a five-day evidentiary hearing, the Court DENIES the motion for a preliminary injunction,” she added.

The injunction was filed by the FTC, claiming that the deal will give the company a competitive edge over its rivals and disrupt the gaming market. They also mentioned how Bethesda’s upcoming game Starfield is also Xbox exclusive. Sony has also been cheering for the FTC on the sidelines claiming that Microsoft will also make Call of Duty an Xbox-exclusive title.

Microsoft responded, claiming that Starfield and Call of Duty are different franchises and that Starfield is a new single-player-based game with no guarantee of success. The company said that they have provided a 10-year contract to PlayStation and Nintendo for Call of Duty games.

The company have also made deals with different cloud gaming platforms that will also provide AAA games on their platform. Chief executive of Activision Blizzard, Bobby Kotick, said, “Our merger will benefit consumers and workers. It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.”

Speaking on the success, Microsoft’s president, Brad Smith, said, “We’re grateful to the Court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue towards a timely resolution.”

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

Following this success, the only major hurdle for Microsoft is UK’s Competition and Markets Authority (CMA) which recently denied the merger. While the CMA might not be an easy task, the company may delay the acquisition and try to provide more incentives and policies to reach an agreement.