Microsoft's $69-Billion Acquisition Of Activision Blizzard Faces A New Hurdle: Here's What Happened

Microsoft President Brad Smith responded to the FTC's latest move by stating that the company welcomes the opportunity to present its case in federal court.

Microsoft has maintained that the acquisition would be advantageous for both gamers and gaming companies.

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The acquisition of Activision Blizzard by Microsoft Corporation is facing a potential setback as the US Federal Trade Commission (FTC) seeks to temporarily halt the deal before it is finalised. The FTC filed a request with a federal judge to block the agreement from closing prior to 11:59pm ET on June 15, as Microsoft and Activision had indicated that the deal could be completed as early as the following Friday, reported Reuters. According to the FTC, the proposed acquisition, valued at $69 billion, would grant Microsoft significant control over Activision's content and create a situation where the software giant could manipulate or diminish Activision's offerings, resulting in a substantial reduction in competition.

Additionally, the FTC expressed concerns that the combined entity could gain access to sensitive business information.

The FTC had previously initiated legal action against the acquisition in early December, citing antitrust concerns. Their argument centred around the potential exclusive access Microsoft's Xbox would have to Activision games, which could disadvantage rival gaming consoles such as those produced by Nintendo and Sony. While the deal was approved by the European Union in May, British competition authorities blocked the takeover in April.

Microsoft President Brad Smith responded to the FTC's latest move by stating that the company welcomes the opportunity to present its case in federal court, while Activision has refrained from commenting on the matter.

Microsoft has maintained that the acquisition would be advantageous for both gamers and gaming companies. To address regulatory concerns, Microsoft has even offered to sign a legally binding consent decree with the FTC, ensuring that games from Activision, such as Call of Duty, would be available to competitors like Sony for a period of ten years. The initial announcement of the deal in January 2022 stated that Microsoft anticipated its completion within their 2023 fiscal year, ending in June.

In response to public reports suggesting that Microsoft and Activision Blizzard were considering closing the deal imminently, an FTC spokeswoman explained the filing for a temporary restraining order, stating that it aimed to prevent the closure while the review process continues.

The case exemplifies the robust antitrust enforcement pursued by President Joe Biden's administration. However, legal experts believe the FTC faces an arduous task in convincing a judge to block the acquisition due to the voluntary concessions offered by Microsoft to alleviate concerns of potential market dominance.

The trial at the FTC's in-house administrative court is scheduled to commence on August 2.