A federal judge says that the FTC has failed to prove that Microsoft's acquisition of Activision Blizzard would be anticompetitive, and because of it, the UK is now pausing its own appeal of the matter.
San Francisco-based Judge Jacqueline Scott Corley has ruled that the US Federal Trade Commission was unlikely to be prove that the proposed acquisition or merger would "substantially lessen competition."
"In sum, the FTC has not shown a likelihood of success on its theory the merger may substantially lessen competition in the Gen 9 console market because the combined firm will have the ability and incentive to foreclose Call of Duty from PlayStation," the ruling says in part.
"To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content," write Judge Corley. "The motion for a preliminary injunction is therefore denied."
Microsoft president and vice chair Brad Smith said that his company was "grateful" to the court for its decision.
"As we've demonstrated consistently throughout this process," he said, "we are committed to working creatively and collaboratively to address regulatory concerns."
A spokesperson said the FTC was "disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles."
The FTC intends to shortly announce "our next step to continue our fight to preserve competition and protect consumers."
And, the ruling has had nearly-immediate carryover to international blocks to the deal. The UK's Competition and Markets Authority (CMA) blocked Microsoft's acquisition in April 2023. After the ruling, it has now paused its appeal process as a result of the FTC trial.
In the UK, the next steps are likely to be a list of conditions that Microsoft must meet to fulfill antitrust obligations. the UK cited cloud gaming dominance as a potential problem with the deal — but it's not at all clear if Microsoft is in fact dominant in that relatively minor sector of gaming.
The ruling against the FTC follows the EU's conditional approval of the merger.