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Microsoft Can Close Its $75 Billion Buy of Activision Blizzard, Judge Rules

Microsoft can close its $75 billion acquisition of Activision Blizzard, a federal judge ruled Tuesday, delivering a major setback to the Biden administration’s attempt to rein in big mergers.

The deal would combine Microsoft’s Xbox videogaming business with the publisher of popular franchises such as Call of Duty, World of Warcraft and Candy Crush. The ruling means there is no current U.S. obstacle to the two companies merging; the companies are still seeking U.K. approval.

U.S. District Judge Jacqueline Scott Corley said in her opinion that the FTC hadn’t shown that Microsoft’s ownership of Activision games would hurt competition in the console or cloud-gaming markets. “To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content,” she wrote.

The Federal Trade Commission had sought an injunction to prevent the two companies from completing their megadeal before the agency began a separate process to challenge it in August.

Microsoft shares were down around 1% after the ruling Tuesday while Activision shares rose about 10%.

The FTC can appeal the ruling, although that is uncommon for the agency. It also can continue with its challenge to block the deal. An FTC spokesman said the agency was disappointed by the decision and would announce its next steps in the coming days.

Activision Chief Executive Bobby Kotick said in a statement that the merger will benefit consumers and workers.

“It will enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry,” he said.

In its suit, the FTC alleges that the deal would give Microsoft the ability to control how consumers beyond users of its own Xbox consoles and subscription services access Activision’s games. Microsoft has argued the deal is good for gamers and for competition.

Courts issue injunctions when a judge believes the plaintiff is likely to prevail in the case. After losing a similar injunction request on a separate acquisition earlier this year, the FTC abandoned its effort to stop a Meta Platforms deal.