A federal judge dealt a blow to the Federal Trade Commission (FTC) by dismissing its attempt to delay Microsoft’s $70 billion acquisition of Activision Blizzard. The court’s decision clears the path for the tech giant and the video game company to potentially merge as early as this month.
Judge Jacqueline Scott Corley of the U.S. District Court for the Northern District of California ruled in favor of Microsoft, stating that the FTC failed to demonstrate a likely scenario where the merger would result in significant competition reduction that harms consumers. The judge rejected the FTC’s request for a preliminary injunction, which aimed to delay the completion of the deal until the agency could challenge it in an internal court.
This outcome represents a setback for the FTC’s efforts to increase its scrutiny of major tech mergers. The agency’s chair, Lina Khan, who advocates for stricter regulation of Big Tech due to concerns about anti-competitive behavior, has been leading this approach.
The FTC has filed lawsuits against Microsoft, Meta (formerly Facebook), and Amazon, but has experienced limited progress in its initiatives. The agency withdrew from one of its cases against Meta, and its efforts have faced challenges.
Both Microsoft and Activision welcomed the court’s ruling, expressing gratitude for the swift and comprehensive decision. They believe that the merger will promote competition and prevent dominant market leaders from maintaining their stronghold.
The FTC spokesperson, Douglas Farrar, expressed disappointment in the outcome and highlighted the perceived threat this merger poses to competition in cloud gaming, subscription services, and consoles. He mentioned that the agency would announce its next steps in the coming days as it continues to fight for preserving competition and protecting consumers.