Microsoft wins US court approval to acquire Activision despite FTC Loss

In a victory over the US Federal Trade Commission, Microsoft Corp. received a court's approval to proceed with its $69 billion acquisition of Activision Blizzard Inc.

With the exception of the UK, which vetoed the deal in May, the decision by Judge Jacqueline Scott Corley in San Francisco means Microsoft could complete its merger with Activision before the July 18 deadline.

Microsoft has stated that it acquired Activision in order to expand into the mobile gaming market, where it currently has almost no presence. Candy Crush's creator, King, is owned by Activision. 

According to Microsoft, the merger will propel the company into third place among all video game companies worldwide, behind Sony Corp. and League of Legends publisher Tencent Holdings Ltd. of China.

On the back of the news, Activision stock increased as much as 6%; at 11:08 a.m. in New York, it was up 4.4% to $86.31. Microsoft's loss of $330.06 was less than 1%.

“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," he added.

Bloomberg Law reported that Activision said the deal would benefit consumers and workers.

The merger “will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry,” Activision Chief Executive Officer Bobby Kotick said.

“We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles," FTC spokesman Douglas Farrar said in an email. 

"In the coming days, we’ll be announcing our next step to continue our fight to preserve competition and protect consumers," he added.

The FTC claimed at a hearing in June that Microsoft's acquisition of Activision would harm competition because the new entity would be incentivized to keep popular games like the best-selling shooter game Call of Duty off of competing consoles and subscription services.

FTC Chair Lina Khan's lawsuit targets tech platform mergers, including Lockheed Martin and Aerojet Rocketdyne Holdings, as part of her aggressive enforcement of merger laws since she was appointed by Biden.

Furthermore, Microsoft's mobile gaming presence is expected to improve with the acquisition of Activision Blizzard's Candy Crush and Call of Duty Mobile. 

However, critics have raised concerns that Microsoft may disadvantage competitors by decreasing access to blockbuster titles or publishing more games exclusively for Xbox and PC.