The long-awaited Microsoft vs FTC court case is getting closure with the final verdict. After a thorough analysis, Judge Jacqueline Scott Corley, who was preceding the case, passed her judgment. We will get to the final decision, but first, let’s look at the case overview.
Why did the FTC take Microsoft to court?
- Microsoft’s proposed takeover of Activision Blizzard for an astronomical sum of $68.7 billion alarmed the FTC (Federal Trade Commission). They hailed that the acquisition would lead to unfair and monopolistic business practices.
- They reasoned that the merger would give the company exclusive rights over the games and total control of the studio as a whole. This would extensively harm the other video game platforms while boosting Microsoft’s sales simultaneously.
- However, Microsoft stated that it had no malicious intentions behind acquiring Activision. They promised they would allow huge Activision franchises like Call of Duty and Overwatch to remain on the other platforms as usual.
- But due to skepticism, a formal appeal was made by FTC to the court against the approval of the deal.
- The deal was approved in a number of countries without any issues, except the USA and the UK. The UK’s regulatory body Competition and Markets Authority (CMA) followed the same steps as the FTC, hoping to block the deal.
The Final Verdict by the court on FTC vs Microsoft
California District Judge Jacqueline Scott Corley stated the following regarding the case:
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. 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.Â
The judge handed FTC a time window until Friday to seek an order in the San Francisco-based 9th U.S. Circuit Court of Appeals if they want to take the case further. However, they would need to put forward concrete evidence that the deal is going to harm the competitors in an unjust way. The proposed deal has a deadline date of July 18, 2023.
Conclusion
Our statement on the mutual request with the CMA for a pause of our appeal in the UK: pic.twitter.com/8Aky2IJjxS
— Brad Smith (@BradSmi) July 11, 2023
The biggest financial deal in the video game industry looks like it is coming to a close. From the verdict, we can see that Microsoft has won the battle in the USA. However, they still have to solve the same problem in the UK. Microsoft and CMA have mutually decided to halt the case and will soon enter a negotiation to solve the concerns.
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