The FTC cannot stop Microsoft's acquisition of Activision Blizzard, the judge rules

A federal judge today declared that the Federal Trade Commission cannot stop the $68.7 billion merger between Microsoft and Activision Blizzard, giving the companies a significant legal victory.

In an effort to block Microsoft's acquisition of the gaming behemoth, which is home to well-known titles like World of Warcraft and Call of Duty, the FTC filed a lawsuit in December. The FTC was concerned that the merger would "enable Microsoft to suppress competitors." Microsoft already has a substantial footprint in the gaming sector because to its creation of products like the Xbox console, the Game Pass membership, and Xbox Cloud Gaming, as well as its ownership of other established game studios like ZeniMax.

Judge Jacqueline Scott Corley, however, decided that the acquisition of Activision Blizzard by Microsoft wouldn't be anti-competitive.

“The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets,” the judge wrote.

This decision is excellent news for Microsoft. Even though the acquisition is still in the works, Microsoft received some more encouraging news today that may help it proceed. Although the deal was challenged in court in the U.K. by the Competition and Markets Authority (CMA), the FTC's victory appears to have changed the situation. According to Microsoft President Brad Smith, the business and the CMA have decided to put a halt to this legal dispute.

“While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA,” Smith wrote in a statement.

The majority of the CMA's appeal focuses on cloud gaming, where it is claimed that Windows' "significant cloud infrastructure" would provide Microsoft an unfair edge if it were to acquire Activision Blizzard games. Microsoft has made an effort to allay these worries by emphasizing that it has agreements in place that ensure Activision Blizzard titles will continue to be available on devices other than the Xbox.

Activision Blizzard has been a firm characterized by turbulence over the past few years. Due to ongoing government probes and sexual harassment allegations, CEO Bobby Kotick was expected to resign. The Department of Fair Employment and Housing of California claimed in one case that the gaming company's workplace had a "frat boy culture." Additionally, according to a Wall Street Journal investigation, Kotick was aware of claims of sexual misbehavior and rape at his workplace for years but took no action.

Activision Blizzard employees who saw this opportunity organized union efforts, and despite interference from the company, the workers created some of the first unions ever at significant U.S. game companies. Labor activists are celebrating Microsoft's court victory today on this front.

An unusual labor neutrality deal between Microsoft and the Communications Workers of America (CWA) was unveiled last year. Thus, Microsoft will maintain its objectivity and provide a just procedure for the voluntary recognition of employee unions.

“By accepting Judge Corley’s decision and allowing this merger to move forward, the Federal Trade Commission has an opportunity to transform the video game and technology labor market by providing a clear path to collective bargaining for almost 10,000 workers,” the CWA wrote in a statement.

Activision Blizzard has been found by the National Labor Relations Board to have unlawfully obstructed employee organizing on numerous occasions; however, if the gaming giant were owned by Microsoft, its management would be subject to that labor contract, making it easier for employees to organize a union at Activision Blizzard.