Microsoft beats FTC in court battle over Activision Blizzard deal, but the deal isn't done yet

Modern Warfare 2 — (Image credit: Activision)

Microsoft has won its court case against the Federal Trade Commission in its bid to purchase Activision Blizzard King.

Today, July 11, a US court ruled that the FTC has not provided substantial evidence to prevent Microsoft's acquisition of Activision Blizzard King from proceeding. That means that, while there are other obstacles to be overcome, most notably the CMA's block in the UK, the deal can close in the US. The temporary restraining order previously expiring July 18 has also been bumped up to end on July 14, though the FTC can still appeal.

"Notwithstanding the overwhelming evidence of the combined firm's lack of incentive to pull Call of Duty from PlayStation, the FTC insists it is probable the combined firm will do so because it is in its financial interests," the US court's ruling on the matter reads.

Article continues below

According to judge Jacqueline Scott Corley, the FTC's "lynchpin" was the opinion of Professor Robin Lee, an economist. Lee argued that the benefits of making Call of Duty exclusive to Xbox would outweigh the cost, but the court found that Microsoft would have no financial incentive to restrict Call of Duty from launching on PlayStation systems, a position Microsoft has long maintained.

The FTC previously alleged that Microsoft acquiring Activision Blizzard would harm "innovation," but the court has found against this claim as well, arguing that the FTC also hasn't provided sufficient evidence that Call of Duty might release later on PlayStation devices than it would on Xbox and PC systems if the deal were to close. It additionally notes that this claim "is not merger-specific and it fails to account for all the other developers who might now be incentivized to collaborate with Xbox or one of its studios like Activision or Bethesda."

Despite all this, the FTC hasn't closed its investigation into the Microsoft deal. It's just its injunction that's been denied. In other words, although the court has found against the FTC, the matter is far from done and dusted, and Microsoft does not yet own Activision.

Hirun Cryer is a freelance reporter and writer with Gamesradar+ based out of U.K. After earning a degree in American History specializing in journalism, cinema, literature, and history, he stepped into the games writing world, with a focus on shooters, indie games, and RPGs, and has since been the recipient of the MCV 30 Under 30 award for 2021. In his spare time he freelances with other outlets around the industry, practices Japanese, and enjoys contemporary manga and anime.