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  • negativenull@negativenull.comOPtoTechnology@beehaw.org•US judge rules Microsoft deal to buy Activision can go forward
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    1 year ago

    WASHINGTON, July 11 (Reuters) - A U.S. judge ruled on Tuesday that Microsoft may go forward with its planned acquisition of videogame maker Activision Blizzard, turning aside antitrust enforcers’ request for a preliminary injunction to temporarily stop the $69 billion deal.

    The court separately extended its temporary restraining order to July 14 at 11:59 pm to allow the Federal Trade Commission to appeal.

    The FTC had originally asked the judge to stop the proposed deal, arguing it would give Microsoft Corp (MSFT.O), maker of the Xbox gaming console, exclusive access to Activision (ATVI.O) games including the best-selling “Call of Duty.” The agency’s concern was that the deal would potentially preclude the availability of those videogames on other platforms.

    “We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles. In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers," said FTC spokesperson Douglas Farrar.

    Microsoft shares edged lower and Activision shares were up 5.6%.

    In its arguments, the FTC has said Microsoft would be able to use the Activision games to leave rival console makers like Nintendo (7974.T) and market-leader Sony Group (6758.T) out in the cold.

    Microsoft President Brad Smith tweeted that the company was “grateful” for the “quick and thorough” decision.

    "Our merger will benefit consumers and workers. It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry,” Bobby Kotick, Activision Blizzard CEO said in a statement. The FTC complaint cited concerns about loss of competition in console gaming, as well as subscriptions and cloud gaming. To address the FTC’s concerns, Microsoft agreed to license “Call of Duty” to rivals, including a 10-year contract with Nintendo, contingent on the merger closing. During the five-day trial in June, Microsoft CEO Satya Nadella argued the company would have no incentive to shut out Sony’s PlayStation or other rivals in order to sell more Microsoft Xbox consoles. At issue in the Microsoft-Activision deal is leadership in a gaming market whose sales are expected to increase by 36% over the next four years to $321 billion, according to a PwC estimate. And while much of the testimony in the recent trial focused on “Call of Duty,” Activision produces other bestsellers like “World of Warcraft,” “Diablo” and the mobile game “Candy Crush Saga.” Microsoft’s bid to acquire the videogame maker also faces opposition from Britain’s Competition and Markets Authority, which blocked the takeover in April. An appeal is scheduled for July 28.