Microsoft Corp (MSFT.O) on Monday won dismissal of a private consumer antitrust lawsuit over its $69 billion proposed purchase of “Call of Duty” maker Activision Blizzard Inc (ATVI.O), but the plaintiffs were given 20 days to refine their legal challenge.
A federal judge in San Francisco ruled that the lawsuit from a group of video game plaintiffs “lacks allegations” supporting their claim that the proposed acquisition would harm market competition.
“Plaintiffs’ general allegation that the merger may cause ‘higher prices, less innovation, less creativity, less consumer choice, decreased output, and other potential anticompetitive effects’ is insufficient,” wrote U.S. District Judge Jacqueline Corley. “Why? How?”
The decision does not affect the U.S. Federal Trade Commission’s (FTC) regulatory challenge to the largest-ever gaming industry deal. Microsoft announced its bid last year, and it also faces competition scrutiny in the EU and UK. Microsoft has denied the deal would harm video game competition.
U.S. antitrust law allows private consumers to challenge mergers and acquisitions apart from government actions. An evidentiary hearing before the FTC is scheduled in early August.
A spokesperson for Microsoft and lawyers for the company did not immediately respond to messages seeking comment.
Joseph Saveri, a lawyer for the plaintiffs, told Reuters they planned to submit an amended lawsuit “with additional factual detail” to “address all of the ways in which the judge indicated we need to allege more.”
Corley scrapped a planned hearing on whether to issue a preliminary injunction. A status hearing is scheduled for April 12.
The case is Demartini v. Microsoft Corp, U.S. District Court, Northern District of California, 3:22-cv-08991.
For plaintiffs: Joseph Alioto of Alioto Law Firm; and Joseph Saveri of Joseph Saveri Law Firm
For Microsoft: Rakesh Kilaru of Wilkinson Stekloff, and Valarie Williams of Alston & Bird
