Why did San Francisco District Judge Jacqueline Scott Corley decide against the injunction, and to allow Microsoft and Activision to finalize their acquisition? The details aren’t that hard to parse.
The decision itself got reported early, but now we also have the text of the decision, courtesy of Florian Mueller.
Now, Judge Corley actually enumerates every argument that the FTC made. She addresses each one and points out why they were not sufficient to convince her to block the deal.
It should also be noted that in many cases, the FTC’s arguments are incomplete, lacking evidence from either witness testimony or other documents.
You can peruse the 53 page document if you’re curious to read through each argument, but none are particularly relevant since Judge Corley rejected each one. It would also be laborious to do so here since FTC only managed to make many smaller arguments, instead of assembling a proper theory that would be bolstered by its logic and organization.
We’ll cut straight to the chase and jump ahead to what Judge Corley says in her conclusion:
“Microsoft’s acquisition of Activision has been described as the largest in tech history. It deserves scrutiny. That scrutiny has paid off: Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox.
It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements to for the first time bring Activision’s content to several cloud gaming services.
This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action.
For the reasons explained, 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.
To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.”
Given how conclusive Judge Corley’s decision was, it’s really unlikely that FTC would win if they tried to appeal it. The other regulator keen on blocking the deal, the CMA, has reportedly already negotiated with Microsoft to address their concerns, following Judge Corley’s decision.
Given all of this, it’s highly likely we will see Microsoft move forward with finalizing their deal with Activision.
