The Federal Trade Commission (FTC) has initiated legal action to prevent Microsoft from acquiring Activision Blizzard, with a focus on halting the deal before the merger deadline on July 18th. In its latest move on Monday afternoon, the agency applied for an injunction to stop the merger from proceeding as planned.
We’ve reached out to the FTC for their response. Microsoft’s Vice Chair and President, Brad Smith, expressed to BuyTechBlog that the company views the injunction as an “accelerator of the legal proceedings” that could expedite the merger. Previously, Microsoft has played down the significance of the deal, insisting that Activision Blizzard doesn’t possess indispensable games. It even proposed that Sony boasts superior exclusive titles. Yet, the FTC points out that Activision is among the handful of prominent game publishers that produce major titles for multiple platforms.
The lawsuit is set to go before the FTC’s internal administrative law judge in August. This official has the power to pass a decision that can be appealed to the Commission for a vote. If the FTC votes to oppose the merger, Microsoft holds the right to challenge this decision in a federal court.
This injunction follows the UK’s Competition and Markets Authority’s declaration a few weeks ago to obstruct the $68.7 billion acquisition. The regulator is wary that Microsoft could potentially monopolize the emerging cloud gaming market, gaining a market share of up to 70 percent. To alleviate these concerns, Microsoft has been forging agreements with game streaming providers to feature titles on their platforms. It has also sought to quell fears of a Call of Duty Xbox exclusive by promising to continue releasing multi-platform versions for the next ten years.
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Despite the hurdles, Microsoft’s proposed merger has seen some triumphs. For instance, the European Union approved the deal. However, the company evidently needs the backing of the US and UK to proceed, and there’s no guarantee it can offer concessions that will appease the regulators in these countries.
Update at 5:29PM ET: The FTC’s official confirmation of filing an injunction against Microsoft’s planned merger with Activision Blizzard has been added.
Frequently Asked Questions (FAQs) about FTC Injunction
What is the latest update on Microsoft’s acquisition of Activision Blizzard?
The latest update is that the Federal Trade Commission (FTC) has filed for an injunction to block Microsoft’s acquisition of Activision Blizzard before the July 18th merger deadline.
Why is the FTC seeking an injunction?
The FTC is seeking an injunction to halt the merger because it has concerns about the potential impact of Microsoft’s acquisition on competition in the gaming industry.
What happens if the FTC’s injunction is successful?
If the FTC’s injunction is successful, it would prevent the merger between Microsoft and Activision Blizzard from closing as scheduled. The lawsuit will then go before the FTC’s administrative law judge, who will make a decision that can be appealed by either party.
What are the concerns raised by regulators about the merger?
Regulators, such as the UK’s Competition and Markets Authority, have expressed concerns about Microsoft potentially gaining a monopoly in the cloud gaming space and obtaining a large market share. They are also wary of exclusive game titles and the impact on competition in the industry.
Has the merger received any approvals?
While the European Union has approved the merger, support from the US and UK regulators is crucial for the deal to move forward. The outcome is uncertain, and Microsoft may need to make concessions to satisfy the concerns raised by regulators.