The Federal Trade Commission (FTC) has not given up on its efforts to block Microsoft’s $68.7 billion acquisition of Activision Blizzard, the largest gaming deal in history. The agency has appeal to challenge a federal judge’s decision to deny an earlier injunction request to terminate the deal.
The FTC argued that the deal would hurt competition and innovation in the gaming industry, and give Microsoft an unfair advantage in the cloud gaming market. The agency claims that Microsoft will be able to leverage its dominant position in PC operating systems, consoles and cloud services to support its own games and platforms over its competitors.
Microsoft, on the other hand, said it was confident that the deal would be approved, and that it would benefit gamers, developers and publishers alike. The company said it will continue to support Activision Blizzard games across multiple platforms, and will invest in creating content that is more diverse and inclusive.
Microsoft won big in its quest to acquire Activision Blizzard. A San Francisco judge ruled that the Federal Trade Commission (FTC) failed to prove that the deal would hurt competition in the video game industry. Judge also said the deal could help consumers by giving them more access to Activision’s popular content.
The FTC accuses Microsoft of withholding information from regulators and trying to dominate the gaming market by reducing competition on console diversions, multi-game subscription services, and cloud gaming. But Judge Jacqueline Scott Corley rejected this claim and sided with Microsoft.
Merger Can Now Continue Despite Appeal
Microsoft Gaming CEO Phil Spencer and Microsoft President Brad Smith praised the court’s decision, saying that the evidence showed that the Activision Blizzard deal was good for the industry. Spencer also said that the FTC’s accusations did not reflect the reality of the gaming market. Microsoft now has until July 18 to close the deal, or else pay Activision Blizzard a $3 billion breakup fee.
The appeal will be heard by US Court of Appeals for the District of Columbia Circuit, which can take months or years to issue a decision. Meanwhile, Microsoft and Activision Blizzard may proceed with their proposed merger, unless the FTC obtains a stay from an appeals court or the Supreme Court. Microsoft now has until July 18 to finalize the deal, or else pay Activision Blizzard’s $3 billion termination fee.
Microsoft’s takeover of Activision Blizzard faces another hurdle in the UK. The Competition and Markets Authority (CMA) had previously blocked the deal and Microsoft has challenged the decision, hoping for a hearing in the summer. But after Microsoft secured its victory in court over the FTC, the two sides agreed to temporarily pause the appeals and try to work out a deal.
However, the CMA also warned that Microsoft’s proposal to address the issue could trigger new problems. regulation probes. CMA media officer Billy Proudlock told The Verges that talks are at a very early stage:
“While the combining parties do not have the opportunity to propose new solutions after the final report is issued, they may choose to restructure the deal, which could lead to a new merger investigation. Microsoft and Activision have indicated that they are considering how the transaction might be modified, and CMA stands ready to engage with them on this basis. These discussions are still in their early stages and the nature and timing of next steps will be determined in due course. Although both parties have requested a pause in Microsoft’s appeal to allow these discussions to take place, the CMA’s decision set out in its final report stands.”
Thus the article about Microsoft-Activision Agreement Faces New Challenges as FTC Decision Appeals
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