A federal judge allowed Microsoft Corp.’s $69 billion deal to buy video game company Activision to move forward, saying the merger was unlikely to harm consumers and competitors.
Judge Jacqueline Scott Corley denied a request for a preliminary injunction filed by the US Federal Trade Commission, the antitrust and consumer protection watchdog, which sued to stop the takeover.
That decision allows Microsoft and Activision, two of the largest companies in the video game industry, to merge ahead of the July 18 deadline. Although the deal has now passed muster in the US and the European Union, which okayed it outright in May, it still faces one major regulatory obstacle: the UK’s Competition and Markets Authority (CMA), the country’s antitrust authority, which voted to block the purchase in April.
Microsoft wants to settle with the UK’s antitrust regulator
In a statement, Microsoft vice chair and president Brad Smith wrote that he’s grateful for the US judge’s decision and hopes for a “timely resolution” to the antitrust challenge from the CMA.
“While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA,” Smith said.
While Microsoft was set to appeal the UK regulator’s decision later this month, Smith said the parties are trying to settle the matter immediately.
The CMA said it’s ready to talk. “We stand ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns,” a CMA spokesperson wrote in a statement to Quartz.
To help make its case in the US, Microsoft, which owns the Xbox platform and numerous gaming studios, committed to keeping Activision’s Call of Duty games available on Sony’s PlayStation and recently struck a deal with Nintendo to add it to Switch consoles.
“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,” Coley wrote in denying the injunction. “To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content.”
Douglas Farrar, an FTC spokesperson, said the agency is “disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles.” He added that the FTC, which can appeal the decision, will announce its next step in the coming days.