Today is a good day for Microsoft, not the most expected day, but a very positive one.both for what happened and, more importantly, for the meaning of it. And yes, as you may have already imagined, we are talking about the long way that Redmonds had to go since they announced their intention to acquire Activision Blizzard King at the beginning of last year, thereby significantly strengthening their position in the game market.

Since then, as you well know, Microsoft she faced both parts of her competitionwith Sony playing a very predominant role in this regard) as regulators that due to the size of the operation, they wanted to subject it to a thorough analysis before determining whether they believed it could harm competition in many sectors of the multi-million dollar video game industry.

As we’ve told you over the months, regulators in Japan, the European Union and China, among many others, have already given their go-ahead to the operation, but the flip side of the coin is signed. the British CMA with its rejectionin which they state (contrary to the industry view they claim to defend) that an acquisition would harm the cloud gaming market, and the US FTC, which along with Sony plays the most aggressive role against surgery.

We must bear in mind that the American regulator did not reach a decision for or against surgery in the final position. However, on more than one occasion she went to the courts to block the operation. It did so earlier this year to try to influence the decisions of European regulators, a move that apparently didn’t work the way the FTC wanted.

And more specifically, just a few weeks ago, the FTC turned to Justice again to temporarily block Microsoft’s acquisition of ABK. However, and as we can read in the sentence, Justice settled with Microsoft and subsequently unblocked Activision Blizzard’s purchase of King. The court victory, which undoubtedly represents a very important turn of events, for several reasons.

The first and most obvious is support that means for Microsoft that justice is on its side, but that’s an even bigger boost when read from a court document. This fragment of his is particularly noteworthy:

“Microsoft’s acquisition of Activision has been described as the biggest in tech history. It deserves a review. This scrutiny paid off: Microsoft committed in writing, publicly and in court, to keep Call of Duty on PlayStation the same value as Xbox for 10 years. He reached an agreement with Nintendo to bring Call of Duty to the Switch. And it has signed several deals to bring Activision content to various cloud gaming services for the first time.

The liability of this court is limited in this case. It is to decide whether, despite these current circumstances, the merger should be halted, or even canceled, pending the resolution of the FTC’s administrative action. For the reasons explained, the Court finds that the FTC has not established a likelihood of predominance in its claim that this particular vertical merger in this particular industry may substantially lessen competition. On the contrary, evidence points to increased consumer access to Call of Duty and other Activision content. For this reason, the motion for injunction is DENIED.»

Thus, the court not only agrees with Microsoft, but also notes that it could not be shown that the FTC’s concerns are well founded. Exactly opposite, recognizes the transaction as potentially positive for the market the FTC claims to protect. In other words, the CMA, FTC, and Sony bloc is once again hearing from another voice participating in this eternal process that their arguments are wrong.

But there is more to it. As I mentioned at the beginning, the purchase operation was announced on January 18, 2022, and both parties (Microsoft and ABK) set a period of 18 months to complete the operation. I.e the deadline is July 18, i.e. in a week and in the event that it fails to complete, Microsoft will have to pay Activision Blizzard a not inconsiderable sum of $3,000 million. So the FTC’s move to try to block the operation in court so close to the deadline does not appear to be a coincidence.

If the sentence was postponed for a week and given that the preliminary measure remained active until the court’s verdict, Microsoft would see the clock running with its hands tied, without being able to do anything. However, the fact that the court unblocked the operation (in the absence of the FTC’s opinion, yes) completely changes the situation, because at this point there are no legal conditions that prevent Microsoft and ABK from proceeding.

Although Microsoft is litigating in the UK to try to overturn the block imposed by the CMA, practically from day one after this controversial decision we began to receive signals that Redmond considered continuing, even if it meant having to substantially adjust its UK operations. In the United States, it’s a bit more complicated because we’re talking about the local market of both companies, but just because it’s complicated doesn’t mean it’s impossible.

Analysis of historical it is clear that the FTC tried several times to stop the operation, but indirectly, either through the courts, or trying to mediate the position of other regulators such as the European one. However, what was his last move in this regard (apart from surprise) did not have the desired effect.

And now this? Is Microsoft going to buy Activision Blizzard King?

That’s the million dollar question. In the absence of a definitive statement from the FTC, which has no scheduled date at this time, the deadline for the operation to be completed will soon expire, and Microsoft is playing a big game. So much so that the option to close the purchase process is on the table, even if the US regulator later decides against it.. A statement that seems harder than ever after today’s court setback.

Although I mentioned earlier in a quick reminder that Microsoft had gone to court to try to unblock the situation in the UK, the truth is that both sides today adjourned the aforementioned court process to sit down for negotiationsthat is, if both sides are willing to give up at some point, UK traffic may be unblocked with CMA approval.

Our statement of mutual application with the CMA to suspend our appeal in the UK: pic.twitter.com/8Aky2IJjxS

—Brad Smith (@BradSmi) July 11, 2023

Of course, it is not the same to give up the British market as the American one, but it is no less true The FTC has known since the beginning of its investigation of the transaction the time frame the parties have set for its completion, and we are talking about a term that was more than sufficient for the rest of the regulators. Heck, even the court in San Francisco was able to analyze the situation and reach conclusions in about a month.

Just a few days ago, it looked like Microsoft would have to pay ABK for missing the purchase deadline and sit down to renegotiate the deal anyway, and the FTC may have hoped that would be the story to come. count in a week. However, the speed with which the court decided, and the sense in which it did so, may play a decisive role in what happens in the next few days.

If Microsoft and the CMA reach an agreement and the FTC doesn’t take some other step to try to block the deal, the possibility of Microsoft finally taking control of Activision Blizzard’s King is closer than ever. So now all eyes are on both the negotiations that have begun in the UK and the US regulator, which is at a point where, given the global situation, it would be wise to admit your mistake and defeat and allow the purchase to be completed within seven days.