The U.S. Federal Trade Commission (FTC) presented its case on Thursday, arguing for a preliminary injunction to temporarily block Microsoft’s acquisition of video game maker Activision Blizzard. The FTC believes that the merger could harm competition in the video game industry and wants the judge to prevent the deal from closing until the agency’s in-house court can rule on the matter.
The proposed $69 billion merger between Microsoft and Activision Blizzard was announced 17 months ago. The FTC claims that if the deal is completed, the combined company would have the ability and incentive to harm competition in various markets related to consoles, subscription services, and cloud gaming.
According to the FTC, the merger would give Microsoft’s Xbox video game console exclusive access to Activision games, leaving competitors like Nintendo and Sony’s PlayStation at a disadvantage. Activision Blizzard owns popular video game titles such as Call of Duty, World of Warcraft, and Candy Crush.
Microsoft’s lawyer, Beth Wilkinson, argued that it would make sense for Xbox to make Activision games available on as many platforms as possible. She also stated that if an injunction is granted, it could result in a three-year administrative proceeding that would effectively kill the deal.
Microsoft has claimed that the merger would benefit gamers and gaming companies alike. The company has even offered to sign a legally binding consent decree with the FTC, ensuring that “Call of Duty” games would be provided to rivals for a decade.
The hearing is scheduled to proceed through June 29, with a decision expected after the Fourth of July holiday. Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick are among the witnesses for next week.
If the judge declines to issue an injunction, Microsoft could move forward with closing the deal ahead of the July 18 deadline and avoid paying a $3 billion breakup fee.
Overall, the outcome of this case will have significant implications for the video game industry and the future of competition within it.
What are the concerns raised by the FTC regarding the impact of Microsoft’s acquisition of Activision Blizzard on competition in the video game industry?
The U.S. Federal Trade Commission (FTC) has presented its case against Microsoft’s acquisition of video game maker Activision Blizzard, arguing for a preliminary injunction to temporarily block the merger. The FTC believes that this merger could negatively impact competition in the video game industry and is seeking to prevent the deal from closing until the agency’s court can rule on the matter.
The proposed $69 billion merger between Microsoft and Activision Blizzard was announced 17 months ago. The FTC asserts that if the deal goes through, the combined company would have the power and motivation to harm competition in various markets related to consoles, subscription services, and cloud gaming.
The FTC’s main concern is that the merger would grant Microsoft’s Xbox video game console exclusive access to Activision games, putting competitors like Nintendo and Sony’s PlayStation at a disadvantage. Activision Blizzard owns popular video game titles such as Call of Duty, World of Warcraft, and Candy Crush.
Microsoft’s lawyer, Beth Wilkinson, argues that it would be beneficial for Xbox to make Activision games available on multiple platforms. She also points out that granting an injunction could lead to a lengthy administrative proceeding that could effectively kill the deal, lasting up to three years.
Microsoft has claimed that the merger would be advantageous for gamers and gaming companies alike. The company has even offered to sign a legally binding consent decree with the FTC, ensuring that “Call of Duty” games would be provided to rivals for the next decade.
The hearing will continue until June 29, and a decision is expected after the Fourth of July holiday. Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick are among the witnesses scheduled to testify next week.
If the judge rejects issuing an injunction, Microsoft could proceed with closing the deal before the July 18 deadline and avoid paying a $3 billion breakup fee.
Overall, the outcome of this case holds significant implications for the video game industry and its future competitiveness.
“The FTC’s move to seek a temporary block on Microsoft’s acquisition of Activision Blizzard shows a necessary step towards ensuring fair competition in the gaming industry. With concerns about potential monopolistic practices, it is crucial for regulatory bodies to carefully scrutinize such significant consolidations to safeguard market diversity and consumer interests.”
“The FTC’s move to seek a temporary block on Microsoft’s acquisition of Activision Blizzard raises concerns about potential market concentration and the impact on competition. It is crucial for regulators to thoroughly investigate the deal to ensure a fair and equitable gaming industry.”