Court Rules Against FTC To Keep Microsoft’s Activision Deal From Closing Pending Antitrust Trial

And away we go. The ongoing saga that is Microsoft's attempt to acquire Activision Blizzard has been going on for months now, with a flurry of news and activity occurring over the past couple of those months as the deal sits before three major regulatory bodies in the EU, the UK, and here in America. If you're keeping score at home, the EU has already approved the deal, the UK's CMA blocked it pending Microsoft's appeal, and the FTC filed an antitrust suit and requested a preliminary injunction barring the deal from going through until that litigation is complete.

That injunction hearing was a mess from the start, with Microsoft promising not to consummate the deal until all litigation with regulatory bodies had been resolved, but then the company turned around and opposed the injunction anyway. Over five days, the court heard testimony from both sides, with the FTC pointing out just how many first party Microsoft titles were being released as exclusives as evidence that it would do likewise with Activision Blizzard titles. Sony stepped in with its own anti-competitive behavior for some reason, while Microsoft appears to have outed Sony's plans for new consoles in its own filings.

And now the court has ruled for Microsoft on the injunction, which frees Microsoft to complete the deal, though, again, Microsoft promised not to until all litigation with regulators is complete. In the ruling itself, the court essentially takes all of the deals Microsoft announced with cloud and console providers to keep Call of Duty multi-platform for 10 years as proof that the FTC is being alarmist. And, the court adds, the FTC hasn't shown it's likely to win on its larger antitrust suit.

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 toCall of Dutyand other Activision content. The motion for a preliminary injunction is therefore DENIED.

What's odd in that is it's sort of besides the point the FTC was making. The court is essentially saying that regulatory efforts caused Microsoft to ink these temporary, non-exclusivity deals for one game franchise, almost congratulating the FTC for doing so. But Call of Duty isn't the only game franchise Activison Blizzard publishes. And the larger question about whether other titles would be made Microsoft exclusives goes mostly unanswered, other than the court pointing out that Minecraft is still multi-platform post Microsoft's acquisition.

Will Microsoft keep to its public commitment to not complete the deal until the antitrust suit and CMA appeal is complete? I doubt it. It has little incentive to do so. Completing the deal makes the job of the regulators all that much more difficult, as courts are rarely willing to roll back already completed deals like that.

Add to all of this that we're starting to see signals that Microsoft thinks it's going to be able to get its issues with the CMA resolved in the UK as well.

Minutes after Judge Corley's decision, both theCMA and Microsoft have agreed to pause their legal battle in the UKto negotiate how the Activision Blizzard deal could be modified to address the CMA's cloud gaming concerns.

That's about as public an indication as we're going to get that a deal will be worked out to allow the purchase to move forward there, as well. As Kotaku notes, the FTC can appeal, but that isn't generally what happens in our toothless regulatory climate, nor is it likely to ultimately torpedo the acquisition.

The FTC cantry to appeal the ruling, and still has its own anti-trust lawsuit in the works, but both appear unlikely at this juncture to derail the deal. The last obstacle in Microsoft's way,the Competition and Markets Authority (CMA)blocking the deal in the UK, also appears to be disappearing. MicrosoftPresident Brad Smith tweetedthat it is currently set to negotiate with the CMA on final remedies to win back approval for the deal.

And so it seems likely this deal goes through, after all. So sit back, relax, and start taking bets on the over/under in months before we start doing posts on all the promises Microsoft made throughout all of this that it subsequently breaks.