Microsoft has scored a huge victory with Judge Jacqueline Scott Corley’s decision to allow the tech giant to move through with its acquisition of Activision Blizzard. As reported by Tom Warren of The Verge, the judge denied the Federal Trade Commission’s (FTC) request for a preliminary injunction following a week of testimony.
A key point of contention was the exclusivity of the popular game franchise Call of Duty on different platforms. The judge’s decision ensures that Microsoft will continue to release Call of Duty games on PlayStation for the next ten years, maintaining parity with the Xbox.
“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 10 years on parity with Xbox. It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements to for the first time bring Activision’s content to several cloud gaming services.
“This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action. For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.”
Sony had expressed concerns that Microsoft might prioritize the Xbox version of the game. Additionally, the ruling acknowledges Microsoft’s agreements pertaining to cloud gaming and the Nintendo Switch.
Prior to the FTC’s injunction request, Microsoft was looking into other options to get beyond a stumbling block imposed by the UK’s Competition and Markets Authority (CMA). Microsoft’s activities appear to have prompted the FTC’s intervention. Following the verdict, however, Microsoft President Brad Smith revealed that the business had struck an agreement with the CMA to halt litigation and amend the deal in order to address the CMA’s concerns about cloud gaming.
Xbox CEO Phil Spencer thanked the court for its prompt decision in Microsoft’s favor. The Redmond-based corporation now has permission to complete the acquisition of Activision Blizzard before the deadline of July 18. However, because their acquisition was thwarted in the UK, Microsoft would have had to settle issues with the CMA. Unexpectedly, Microsoft and the CMA stated immediately after the decision that they had come to a modification of the arrangement, avoiding further litigation.
Judge Corley’s decision is still subject to the FTC’s right to appeal until July 14 at 11:59 p.m. PT. Currently, it’s unclear how a future appeal will turn out.
Although the exclusivity of Call of Duty was the case’s main focus, it is generally accepted that Microsoft’s $68.7 billion acquisition is part of a larger strategy.
Microsoft disclosed its plans to launch a mobile gaming store that might compete with current marketplaces like the App Store and Play Store in documents submitted to the CMA.
The tech giant highlighted the value of the mobile sector and offered a graph showing the potential impact of games like Candy Crush and Call of Duty Mobile. The dominance of Apple and Google in this market could potentially be challenged by Microsoft’s app store.
Source: Androidauthority
