California Judge Clears Microsoft’s Activision Blizzard Deal Amidst Antitrust Battle

  • California judge allows Microsoft to proceed with Activision Blizzard acquisition, denying FTC's request for preliminary injunction.
  • Microsoft commits to keeping Call of Duty on PlayStation for 10 years and expanding it to Nintendo Switch, increasing consumer access to popular gaming content.
  • Legal battle with UK regulator paused as Microsoft negotiates modifications to address concerns regarding cloud gaming, impacting the future of gaming in South Africa.
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In a groundbreaking ruling that has far-reaching implications for the gaming industry, a California judge has given the green light to Microsoft’s acquisition of Activision Blizzard, clearing the way for the largest tech merger in history. After a five-day trial, Judge Jacqueline Scott Corley dismissed the Federal Trade Commission’s (FTC) request for a preliminary injunction, stating that the regulator had not demonstrated a likelihood of success in its claim that the merger would substantially reduce competition.

The ruling, which has captured the attention of South African gamers, emphasized Microsoft’s commitment to maintaining Call of Duty on PlayStation for ten years, ensuring equal treatment with Xbox. Additionally, Microsoft has pledged to bring the popular franchise to the Nintendo Switch platform, signaling an expansion of gaming options for South African console enthusiasts. The court recognized these commitments and highlighted the potential for increased consumer access to Call of Duty and other Activision content.

Brad Smith, President of Microsoft, expressed gratitude for the court’s swift and comprehensive decision, expressing hope that other jurisdictions would also reach a timely resolution. Phil Spencer, Head of Xbox, a key witness in the trial, took to Twitter to react to the ruling. Spencer stated that the evidence presented during the trial demonstrated the benefits of the Activision Blizzard deal for the industry, dismissing the FTC’s concerns about console switching, multi-game subscription services, and cloud gaming as disconnected from the realities of the gaming market.

The ruling has also received a response from Bobby Kotick, CEO of Activision Blizzard. Kotick praised the merger, highlighting its potential to benefit consumers and workers alike. He expressed optimism that the deal would foster healthy competition and prevent dominant market leaders from stifling the rapidly growing gaming industry.

However, the ruling does not mark the end of legal challenges for Microsoft. The company is still engaged in a legal battle with the UK’s Competition and Markets Authority (CMA), which initially blocked the proposed acquisition in April. Microsoft is currently appealing this decision, with a hearing scheduled to begin on July 28th. Both Microsoft and the CMA have agreed to pause their legal battle to explore modifications to the deal that could address the CMA’s concerns regarding cloud gaming. The outcome of these negotiations will have implications for South African gamers and the availability of gaming options in the region.

While European regulators have already given their approval to the merger in May, allowing Microsoft to proceed without the UK’s involvement, all parties involved are actively seeking a resolution to avoid a complex scenario.

The FTC has until July 14th to appeal Judge Corley’s decision. It remains to be seen whether the regulator will pursue further action or abandon its case against Microsoft and Activision Blizzard. The outcome of the appeal process will shape the future of gaming in South Africa and determine the level of competition and consumer choice available in the market.

This ruling represents a setback for FTC Chair Lina Khan, who has been actively targeting major technology companies since assuming her role in 2021. The decision’s implications for South African gamers underscore the significance of this legal battle and its potential impact on the gaming landscape.

The recent ruling by Judge Jacqueline Scott Corley paves the way for Microsoft’s acquisition of Activision Blizzard. As South African gamers eagerly await the outcome of the legal battles, the future of gaming in the region hangs in the balance. The decision will shape the level of competition and gaming options available to South African gamers, with implications that reach far beyond the gaming industry.

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