The Federal Trade Commission (FTC) has taken legal action to temporarily halt Microsoft’s acquisition of Activision Blizzard. The FTC aims to prevent the deal, valued at $68.7 billion, from closing before the government’s case against it is heard.
The FTC has revealed that Microsoft and Activision indicated the deal could be finalized as early as Friday. To prevent this, the FTC has requested a federal judge to block any final agreement until June 15th.
According to the Commission, if the deal were to proceed, Microsoft would gain significant control over Activision’s content, leading to potential competition reduction through content withholding or degradation.
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US authorities are concerned that without intervention from the court, the merged entity could significantly influence Activision’s operations and business plans, potentially gaining access to sensitive business information.
The FTC, responsible for enforcing antitrust law, had previously requested an in-house administrative judge to block the transaction in December, arguing that it would grant Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo and Sony’s PlayStation at a disadvantage.
While the European Union approved Microsoft’s bid to acquire Activision in May, the takeover was blocked by British competition authorities in April.
Microsoft’s President, Brad Smith, has expressed the company’s willingness to present its case in federal court. On the other hand, Activision has not commented on the matter.
Microsoft has argued that the deal would benefit gamers and gaming companies, even offering to sign a legally binding consent decree with the FTC to provide Activision’s “Call of Duty” games to rivals, including Sony, for a duration of ten years. Microsoft initially announced the deal in January 2022, expecting it to close within its 2023 fiscal year, which ends in June.
In response to the imminent closure of the deal, the FTC has filed a request for a temporary restraining order to prevent Microsoft and Activision from finalizing the transaction while the review is ongoing.
The case highlights the robust approach to antitrust enforcement pursued by the administration of US President Joe Biden.
However, antitrust experts believe that the FTC faces an uphill battle in convincing a judge to block the deal due to the voluntary concessions offered by Microsoft to address concerns about potential dominance in the gaming market.