Microsoft Triumphs in FTC Appeal Regarding Activision Blizzard Acquisition

Microsoft Prevails in FTC Appeal, Securing Activision Blizzard Acquisition

After nearly two years of legal battles, the Federal Trade Commission’s (FTC) appeal against Judge Jacqueline Scott Corley’s ruling in the Northern District of California regarding the Activision Blizzard merger has concluded in favor of Microsoft. This decision marks a significant victory for the tech giant in its quest to complete a $68.7 billion acquisition.

Court Ruling Summary

According to a report by Reuters, the three-judge panel at San Francisco’s 9th U. S.Circuit Court of Appeals unanimously affirmed the lower court’s decision from July 2023, stating that the right legal standards were applied. Here are the key findings from the ruling:

Console Market Impact: The panel agreed with the lower court’s assessment that the FTC did not adequately demonstrate that the merger would lead Microsoft to exclude or diminish competition by making the highly popular game, Call of Duty, exclusive to Xbox or providing an inferior version for Sony’s PlayStation.
Library Subscription Services: The court found no misuse of discretion by the district court in ruling that the FTC did not sufficiently prove that the merger would reduce competition in the library subscription services market. This was particularly relevant since Activision Blizzard had historically resisted distributing its content through subscription services.
Cloud-Streaming Market Concerns: The panel concluded that the FTC failed to demonstrate a significant likelihood that the merger would harm competition within the cloud-streaming market. There was insufficient evidence to suggest that Activision Blizzard’s content would be made available to this sector without the merger.

Pathway to Finalization

This ruling was vital for Microsoft’s path to triumph, potentially averting the collapse of the entire acquisition should the court have sided with the FTC. Microsoft is set to formally announce the closure of the acquisition on October 13, 2023.

Shifting Strategies and Broader Access

The initial apprehensions expressed by the FTC regarding Microsoft’s potential to restrict Call of Duty to Xbox were quickly debunked. In a noteworthy shift, Microsoft has emphasized a more inclusive strategy, bringing its titles, including upcoming relaunches like Gears of War: Reloaded, to competing platforms such as PlayStation 5 and Nintendo.

Moreover, with all Microsoft-owned games now accessible on various cloud platforms, including NVIDIA GeForce NOW and Boosteroid, it is evident that the acquisition has broadened access to these games, welcoming a more extensive player base.

As the gaming landscape evolves, this acquisition represents a significant milestone for Microsoft and the industry at large, signaling a trend towards greater collaboration across platforms rather than restrictive practices.

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