Microsoft wins Activision hearing against FTC

Microsoft’s planned $68.7 billion purchase of Call of Duty and World of Warcraft publisher Activision Blizzard can go forward, a federal judge ruled on Tuesday. Judge Jacqueline Scott Corley denied the Federal Trade Commission’s request to stop the deal before its deadline for completion on July 18.

“The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation,” Corley wrote in her order, “or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets.”

This ruling was made after a one-week hearing in July where federal regulators said that Microsoft could gain an anticompetitive advantage by buying a large publisher like Activision. Government lawyers said Microsoft was likely to limit PlayStation users’ access to Activision Blizzard titles like Call of Duty, either by making them exclusive to Microsoft’s Xbox and PC platforms, or publishing diminished versions to Sony’s.

“Our merger will benefit consumers and workers,” Activision Blizzard chief executive Bobby Kotick said on Tuesday. “It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.”

Two other major regulatory bodies in the United Kingdom and European Union have decided too; the U.K.’s Competition and Markets Authority moved to block the deal in April; the European Union approved it in May. Microsoft has appealed CMA’s ruling shortly after the announcement. The process should take time. A majority of countries, both large and small, have approved the deal.

Microsoft won the case, which means it can complete its acquisition without having to pay any termination fees. This is provided that they do not go through the U.K. and instead make an arrangement with the Competition and Markets Authority. Microsoft’s attorneys had said that a ruling in favor of the FTC — which was trying to have the deal stopped until its own administrative hearing could be resolved — would scrap the acquisition outright, regardless of what the FTC’s own hearing determined.

“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,” Brad Smith, Microsoft’s president, said in a statement Tuesday. “As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”

Developing…