Microsoft’s acquisition of Activision Blizzard is one step closer to becoming a reality as the Federal Trade Commission (FTC) has lost its latest attempt to block the deal. This comes after a US federal judge denied the FTC’s request for a preliminary injunction earlier in the week. The FTC appealed the decision, but the Ninth Circuit Court of Appeals has now denied its request for emergency relief to prevent Microsoft from closing the deal until the result of the appeal is complete.
Microsoft welcomed the denial, with Brad Smith, vice chair and president of Microsoft, stating, “We appreciate the Ninth Circuit’s swift response denying the FTC’s motion to further delay the deal. This brings us another step closer to the finish line in this marathon of global regulatory reviews.”
With the denial, Microsoft is now free to close its Activision Blizzard deal after a temporary restraining order, which was part of Judge Jacqueline Scott Corley’s order, expires at 11:59 PM PT tonight. Microsoft has until July 18th to close the deal, or it may need to renegotiate terms with Activision Blizzard or pay $3 billion in breakup fees if Activision wants to walk away.
However, the deal still faces obstacles in the UK. The Competition and Markets Authority (CMA) in the UK blocked Microsoft’s deal earlier this year, citing concerns about competition in the emerging cloud gaming market. Both the CMA and Microsoft have agreed to pause their legal battles to explore modifications to the transaction that could address the CMA’s concerns.
The CMA recently warned that Microsoft’s proposals may lead to a new merger investigation, and discussions between the regulator and Microsoft are still in the early stages. The CMA has extended its investigation into the deal, moving the date for final undertakings or a final order from July 18th to August 29th.
In light of the UK blockage, Bloomberg reported that Microsoft is considering selling UK cloud-gaming rights to another company in the telecommunications, gaming, or internet industry to allow the Activision deal to proceed in the UK.
While Microsoft is now closer to finalizing its acquisition of Activision Blizzard, the deal still faces challenges in the UK. The outcome of the CMA’s investigation and any potential modifications to the transaction will determine the deal’s fate in the UK market.
What challenges does Microsoft’s acquisition of Activision Blizzard still face in the UK and how are they being addressed
Microsoft’s acquisition of Activision Blizzard has cleared another hurdle as the Federal Trade Commission’s (FTC) latest attempt to block the deal has been denied. A US federal judge had previously denied the FTC’s request for a preliminary injunction, and now the Ninth Circuit Court of Appeals has rejected the FTC’s request for emergency relief to prevent the deal from closing. Microsoft can now proceed with the acquisition once a temporary restraining order expires. However, the deal still faces challenges in the UK, where the Competition and Markets Authority (CMA) has blocked it due to concerns about competition in the cloud gaming market. Microsoft and the CMA are currently in discussions to address these concerns, and the final outcome in the UK remains uncertain.
This article highlights the victorious move of Microsoft in acquiring Activision Blizzard despite the FTC’s second failed attempt. An interesting development in the tech industry!
This acquisition is a win for Microsoft and a loss for the FTC. Microsoft’s strategic move in acquiring Activision Blizzard will surely reshape the gaming industry, leaving the regulatory body with limited options.