Judge rejects FTC block of Microsoft’s acquisition of Activision Blizzard

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A federal judge on Tuesday ruled against the Federal Trade Commission’s attempt to block Microsoft’s $69 billion purchase of video game publisher Activision Blizzard, dealing a blow to the regulator’s antitrust efforts against Big Tech.

U.S. District Court Judge Jacqueline Scott Corley for the Northern District of California, a Biden appointee, said the FTC failed to show it was likely to prove that the merger would harm consumers and reduce competition. She denied the agency’s request for an injunction that would have postponed the deal’s completion and given the FTC more time to challenge it.

“The FTC has not raised serious questions regarding whether the proposed merger is likely to substantially lessen competition in the console, library subscription services, or cloud gaming markets,” Judge Corley wrote.

The case was an important test for the FTC’s heightened scrutiny of the technology industry under Chairperson Lina Khan, who was installed by Mr. Biden in 2021 because of her tough stance on what she sees as monopolistic behavior by tech giants such as Amazon, Google and Facebook parent Meta.

Another judge rebuffed the FTC’s attempt this year to stop Meta from taking over the virtual reality fitness company Within Unlimited.

In the Microsoft trial, the Redmond, Wash., company appeared to have the upper hand in the five-day San Francisco court hearing that ended late last month. The trial showcased testimony by Microsoft Chief Executive Officer Satya Nadella and Activision Blizzard CEO Bobby Kotick, who both pledged to keep Activision’s blockbuster game Call of Duty available to people who play it on consoles — particularly Sony’s PlayStation — that compete with Microsoft’s Xbox.

“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,” Mr. Kotick said in a statement after Tuesday’s ruling.

The FTC had asked Judge Corley to issue an injunction temporarily blocking Microsoft and Activision from closing the deal before the FTC’s in-house judge could review it in an August trial.

Both companies suggested that such a delay would effectively force them to abandon the takeover agreement they signed nearly 18 months ago. Microsoft has promised to pay Activision a $3 billion breakup fee if the deal doesn’t close by July 18.

• This article is based in part on wire-service reports.

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