The Supreme Court rejected an 11th-hour bid to stop Microsoft’s $69 billion acquisition of Activision Blizzard, maker of popular games like Call of Duty, Candy Crush and World of Warcraft, knocking down what appears to be the last legal challenge standing in the way of the deal’s closing.
Supreme Court Justice Elena Kagan on Tuesday turned down the request, filed by a group of gamers, for an emergency injunction to halt the merger. On Friday, the federal Ninth Circuit Court of Appeals denied a request by the Federal Trade Commission to stop the merger, coming after a federal district court judge on July 11 rejected the FTC’s request to block Microsoft’s acquisition of Activision Blizzard. Kagan, who reviews emergency applications to the Supreme Court from the Ninth Circuit, did not provide an explanation for her decision to deny the motion.
On Monday, the group of gamers asked the Supreme Court to block the deal, asserting that Microsoft’s resulting power in the game industry would result in consumer harms. “The merger between Microsoft and Activision would be one of, if not the largest technology mergers in history, at a time when concentration among technology companies is already threatening the competitive balance of our economy and even our political systems,” Joseph Alioto, the lawyer representing the group, wrote in their application to the Supreme Court.
On Sunday, Microsoft announced a binding deal with Sony that will keep Activision’s “Call of Duty” on PlayStation platforms for 10 years following Microsoft’s acquisition of the games company. In her July 11 ruling turning down the FTC’s motion to stop the deal, District Court Judge Jacqueline Scott Corley cited in part Microsoft’s commitment to keep Call of Duty on PlayStation for 10 years, on parity with Xbox, and that Microsoft inked an agreement with Nintendo to bring the game to Nintendo Switch. The judge found that “the FTC has not shown a likelihood it will prevail” on its claim that the merger “may substantially lessen competition,” she wrote. “To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content.”
Microsoft first announced its proposed acquisition of Activision Blizzard in January 2022.
The deal has also encountered opposition in the U.K., where the country’s Competition and Markets Authority (CMA) issued a decision last year to stop the Microsoft-Activision merger on grounds that it is anti-competitive. Last week, Microsoft and the CMA said they were pausing their legal fight over the deal; subsequently, however, the CMA said any modification to Microsoft’s deal for Activision Blizzard could lead to a new investigation.
Microsoft and Activision Blizzard are not likely to close the deal by the merger agreement’s original July 18, 2023, deadline as they look to secure final regulatory approval in the U.K., Bloomberg reported, citing anonymous sources.
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