The Federal Trade Commission (FTC) is not giving up its efforts to prevent Microsoft’s acquisition of Activision Blizzard, which is valued at $68.7 billion. The agency has appealed Judge Jacqueline Scott Corley’s denial of their request for a preliminary injunction to temporarily halt the deal. The FTC has filed a lawsuit to block the merger on antitrust grounds, and an administrative trial is scheduled to begin in August. However, the companies have set a merger deadline of July 18th, which has raised concerns that the deal may be finalized before the trial starts.
The FTC’s concern about the merger deadline stems from the fact that a UK regulator has already blocked the deal in their country due to concerns about cloud technology. The agency worries that Microsoft and Activision may proceed with the merger despite the UK regulator’s decision. Bloomberg was the first to report that the FTC was considering an appeal against Judge Corley’s ruling. The agency has stated that it will announce its “next step to continue our fight to preserve competition and protect consumers” in the coming days.
Judge Corley’s ruling specified that unless the FTC obtains an emergency stay from the Ninth Circuit Court of Appeals by July 14th, 11:59 PM PT, the temporary restraining order preventing Microsoft and Activision from finalizing the deal will be dissolved. The restraining order had been put in place until Judge Corley made a decision on the preliminary injunction.
Following Judge Corley’s decision, Microsoft, Activision Blizzard, and the UK’s Competition and Markets Authority (CMA) have agreed to pause their legal battle and explore the possibility of reaching a compromise. The CMA clarified that although the merging parties cannot propose new remedies once a final report has been issued, they can choose to restructure the deal, which may result in a fresh merger investigation. This could further delay the takeover beyond the July 18th deadline.
The FTC’s opposition to the Microsoft-Activision Blizzard merger centers on antitrust concerns. The agency argues that the consolidation of two major players in the video game industry would lead to a substantial reduction in competition. If the merger were to proceed, Microsoft would gain significant control over popular franchises such as “Call of Duty,” “World of Warcraft,” and “Candy Crush,” giving the company a dominant position in the market. The FTC believes that this dominance could result in higher prices for consumers and reduced innovation.
Microsoft has defended the merger, stating that it will benefit players and creators alike. The company argues that combining its resources with Activision Blizzard’s expertise will enable them to deliver better gaming experiences and more immersive content to a broader audience.
The outcome of the FTC’s appeal and the ongoing legal proceedings between Microsoft, Activision Blizzard, and the CMA will determine the fate of the merger. The FTC’s goal is to prevent the deal from going through, while the companies involved are exploring potential compromises to address the regulatory concerns raised. The final decision will have significant implications for the future of the video game industry and competition within it.
In conclusion, the FTC is appealing the denial of its request for a preliminary injunction to halt Microsoft’s acquisition of Activision Blizzard. The agency has sued to block the merger on antitrust grounds and is determined to preserve competition and protect consumers. The merger deadline of July 18th and the UK regulator’s decision to block the deal in their country have raised concerns about the potential completion of the merger before the trial starts. The FTC’s appeal and the ongoing legal battle between the companies involved will shape the future of the merger and the video game industry as a whole.
