FirstFT: US judge rejects FTC’s attempt to halt Microsoft’s Activision deal

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Good morning. Microsoft has moved closer to securing its $75bn purchase of Activision Blizzard after a US federal judge rejected the Federal Trade Commission’s attempt to halt the deal and the UK’s competition watchdog signalled it was open to discussing a merger it had previously rejected.

Shares in Activision, the group behind video games including Call of Duty, were up more than 11 per cent at $92 in lunchtime trading in New York, their closest to the $95-per-share offer price since Microsoft announced its bid in January 2022.

“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,” Judge Jacqueline Scott Corley wrote in her decision.

The FTC has until Friday to appeal against the decision. The agency had sought a preliminary injunction to block the deal pending the outcome of a separate challenge it has mounted in its in-house court, where proceedings are due to start on August 2.

The ruling deals a heavy blow to one of the most high-profile antitrust challenges under Joe Biden’s administration, which has appointed progressive officials such as FTC chair Lina Khan to crack down on anti-competitive conduct across the US economy.

The judge’s decision clears the way in the US for Microsoft and Activision to close their deal before July 18, the deadline set when they announced the transaction.

Here’s what else I’m keeping tabs on today:

• Former Samsung executive in court: The trial of Choi Jin-seok, accused of corporate espionage and stealing sensitive information, begins today.

• Inflation rate figures: Consumer price index figures for India, Russia, Spain and the US are set to be released.

• G7 security agreement: The group plans to announce a multilateral security agreement for Ukraine.

Five more top stories

1. Nato leaders have agreed a statement pledging to “extend an invitation” to Ukraine to join the alliance when “allies agree and conditions are met”. The carefully hedged communiqué drew immediate condemnation from Kyiv for its lack of a firm timeframe. Here’s more on the Nato summit and the compromise on Ukraine’s membership.

• More Nato news: The US said it “intends to move forward” with transferring F-16 fighter jets to Turkey, hours after Turkey’s president agreed to drop his veto on Sweden joining Nato.

2. China is drawing up tighter rules to govern generative artificial intelligence. The Cyberspace Administration of China, the powerful internet watchdog, is aiming to create a system to force companies to obtain a licence before they release generative AI models, said two people close to the regulator. Read more on Beijing’s plan to regulate AI.

3. Trade talks between Australia and the EU have stalled after Australian minister Don Farrell cut short a visit to Brussels without resolving a dispute over meat quotas. Here’s more on the breakdown in negotiations.

4. Taiwan will hold its first large-scale evacuation drill in decades this month in a sign that it is trying to harden civil defences against a potential Chinese attack. The plans mark a drastic change from past iterations of the annual Wan’an air raid drill, triggered by a growing Chinese military intimidation campaign. Here are more details on the massive evacuation exercise.

5. Singaporean state-owned investor Temasek Holdings has reported its worst returns since 2016 and warned it has slowed investment after “the most challenging year for markets over the last decade”. Temasek’s results underline the struggle of global investors to adapt to a new era of higher interest rates, recession risks and geopolitical tensions. Read the full story.

The Big Read

When Rishi Sunak became UK prime minister last October, he promised his party and Britain a fresh start. Some Tory MPs even held out distant hope of recovering to win the Conservatives a fifth successive term in office. Instead, Sunak has failed to escape his party’s recent chaotic past. New economic clouds are gathering over his premiership and plunging his party into renewed gloom.

We’re also reading and listening to . . .

Chart of the day

Cryptocurrency transactions are illegal on the Chinese mainland, where Beijing has also banned overseas exchanges from serving onshore clients on the internet. But in Hong Kong, crypto trading is legal and the city is seeking to become a digital assets trading hub. Bricks-and-mortar crypto shops are thriving, helped by surging demand from mainland Chinese visitors and ambiguity over their regulatory status.

Take a break from the news

After a long and vexed rebirth, the once legendary London seafood restaurant Manzi’s is back. FT’s Ajesh Patalay got a first taste of the extensive menu, which includes a large selection of crustacea among the starters.

Additional contributions by Emily Goldberg, Gordon Smith and Tee Zhuo