The Microsoft vs. FTC Trial Concludes with a Verdict

After much anticipation, the verdict is in on the recent trial between the Federal Trade Commission (FTC) and Microsoft. Judge Jacqueline Scott Corley has ruled in favor of Microsoft, denying the FTC’s preliminary injunction request.

In her ruling, Judge Corley acknowledged Microsoft’s acquisition of Activision as the largest in tech history, emphasizing the need for scrutiny. However, she found that Microsoft’s commitments to keeping Call of Duty on PlayStation for 10 years, bringing the game to Nintendo Switch, and making agreements with cloud gaming services indicated more consumer access to Activision’s content. Based on this, Judge Corley concluded that the FTC had not demonstrated a likelihood of substantially lessening competition and therefore denied the motion for a preliminary injunction.

The Court’s Decision

“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.”

In response, FTC spokesperson Douglas Farrar expressed disappointment and stated that the FTC will announce its next steps to preserve competition and protect consumers. Activision Blizzard boss Bobby Kotick also issued a statement, emphasizing that the merger will benefit consumers and workers by enabling competition in the rapidly growing industry.

Microsoft president Brad Smith expressed gratitude for the court’s decision and highlighted the company’s commitment to addressing regulatory concerns collaboratively. Xbox boss Phil Spencer also shared his reaction on Twitter, emphasizing that the evidence presented during the trial demonstrated the benefits of the Activision Blizzard deal for the industry.

The court’s decision allows Microsoft to proceed with the buyout before the July 18 deadline. However, the company still faces regulatory hurdles, such as the UK’s Competition Markets Authority (CMA), which previously blocked the deal. Microsoft has appealed the decision, and a hearing is scheduled for July 28 to August 4.

In an updated statement, Microsoft’s Brad Smith stated that the company is considering modifications to the transaction to address the CMA’s concerns. As a result, Microsoft, Activision, and the CMA have agreed to a stay of litigation in the UK, allowing them to work on restructuring the transaction agreeably.

The CMA confirmed its readiness to consider proposals from Microsoft and Activision that address the concerns outlined in its final report. The CMA expressed concerns about the deal’s impact on cloud gaming, fearing reduced innovation and choice for UK gamers.

Throughout the trial, significant revelations came to light, including Xbox’s interest in acquiring specific game developers and PlayStation boss Jim Ryan’s perspective on console exclusivity. Despite these revelations, the court ultimately ruled in favor of Microsoft.

To learn more about the trial, you can find a full recap and daily analysis on our website.

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