Microsoft Acquisition of Activision Blizzard Moves Ahead a Space as FTC Injunction Denied

UK regulators still present an obstacle for the purchase despite its stateside momentum

Satya Nadella
Stephen Brashear/Getty Images

The FTC’s injunction request proposing halting or terminating Microsoft’s Activision Blizzard acquisition has been denied, moving Microsoft’s blockbuster deal one step closer to being reality.

The major obstacle that remains is the U.K.’s Competition and Markets Authority, which blocked the deal. Microsoft still has to work with the U.K. or figure out an alternate course of action for how it deals with its purchase being denied there.

“We’re grateful to the court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution,” Microsoft president Brad Smith said. “As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”

Activision Blizzard posted a blog on the news, which contained a copy of an email that the company’s CEO, Bobby Kotick, sent to employees. “We’re optimistic that today’s ruling signals a path to full regulatory approval elsewhere around the globe, and we stand ready to work with U.K. regulators to address any remaining concerns so our merger can quickly close,” the email reads.

“Our merger will benefit consumers and workers,” Kotick said in a separate statement. “It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry.”

The FTC indicated in a statement it won’t be dropping the matter.

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

Despite Microsoft’s stateside progress with clearing its acquisition of Activision Blizzard, it still has the U.K. to contend with. Immediately after the FTC news dropped, Smith went to Twitter to announce that Microsoft was halting its appeal efforts in the U.K. and was instead opting for a more cooperative approach, hoping to find mutually agreeable terms with the CMA.

In May, when asked in a CNBC interview if his company would consider sidestepping the U.K. entirely should the CMA not play ball, Microsoft CEO Satya Nadella simply said, “Let’s wait for it all to play out.” Nadella also said he was surprised by the resistance the deal was facing.

Even with the CMA situation up in the air, Microsoft’s made big progress elsewhere in sealing up loose ends to finalize their Activision Blizzard acquisition. As noted in the aforementioned Activision Blizzard blog post, the U.S. is the thirty-ninth country where the deal has been cleared to proceed.

In May, the European Union got onboard with the deal after Microsoft worked with it to establish agreeable parameters.