Potential Setback for Microsoft Corporation's Acquisition of Activision Blizzard
Key Highlights :
Microsoft Corporation's proposed acquisition of Activision Blizzard, valued at $69 billion, is facing a potential setback as the US Federal Trade Commission (FTC) seeks to temporarily halt the deal before it is finalized. The FTC has filed a request with a federal judge to block the agreement from closing prior to 11:59 pm ET on June 15, citing antitrust concerns. The FTC has expressed concerns that the combined entity could gain access to sensitive business information and that the proposed acquisition would grant Microsoft significant control over Activision's content, creating a situation where the software giant could manipulate or diminish Activision's offerings, resulting in a substantial reduction in competition.
Microsoft President Brad Smith has responded to the FTC's latest move by stating that the company welcomes the opportunity to present its case in federal court, while Activision has refrained from commenting on the matter. Microsoft has maintained that the acquisition would be advantageous for both gamers and gaming companies, and has offered to sign a legally binding consent decree with the FTC, ensuring that games from Activision, such as Call of Duty, would be available to competitors like Sony for a period of ten years.
The case exemplifies the robust antitrust enforcement pursued by President Joe Biden's administration. However, legal experts believe the FTC faces an arduous task in convincing a judge to block the acquisition due to the voluntary concessions offered by Microsoft to alleviate concerns of potential market dominance. The trial at the FTC's in-house administrative court is scheduled to commence on August 2.
It remains to be seen whether the acquisition will be allowed to proceed or if the FTC's request will be granted. In the meantime, Microsoft and Activision Blizzard will have to wait for a ruling from the federal judge before the deal can be finalized.
