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US FTC asks the court to prevent Microsoft from purchasing Activision

The FTC requested a federal judge to halt any final agreement before 11:59 p.m. ET on June 15, claiming Microsoft and Activision had indicated the deal could close as soon as this Friday.

Microsoft

On Monday, the Federal Trade Commission requested a court to temporarily delay Microsoft Corp.’s acquisition of Activision Blizzard in order to prevent the $69 billion transaction from going through before the government’s case against it is heard.

The FTC requested a federal judge to halt any final agreement before 11:59 p.m. ET on June 15, claiming Microsoft and Activision had indicated the deal could close as soon as this Friday.

According to the FTC, the agreement would give Microsoft the “ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition.” It would also be the largest transaction ever made in the history of the video game business.

Without a judge’s intervention, the combined company, according to the FTC, “could alter Activision’s operations and business plans,” giving the software behemoth access to confidential company data.

Early in December, the FTC, which upholds antitrust laws, asked an internal administrative judge to halt the transaction on the grounds that it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony Group Corp.’s PlayStation out in the cold.

The EU accepted Microsoft’s $69 billion acquisition proposal of the “Call of Duty” videogame company in May, but the British competition regulators rejected the acquisition in April.

Activision’s stock declined 0.8%, while Microsoft’s shares ended the day up 1.5%.

Brad Smith, the president of Microsoft, said in a statement, “We welcome the opportunity to present our case in federal court.” Activision remained silent.
Microsoft has offered to sign a legally enforceable consent decree with the FTC to provide “Call of Duty” games to rivals like Sony for a decade. Microsoft claims the deal will benefit players and gaming firms alike. Microsoft stated that they anticipated the transaction to finish in their 2023 fiscal year, which ends in June, when they first announced it in January 2022.

According to reports in the media that Microsoft and Activision Blizzard may be considering terminating their agreement soon, the FTC has requested a temporary restraining order.

The case exemplifies the administration of American President Joe Biden’s tough stance on antitrust enforcement.
However, antitrust experts claim that given the voluntary concessions made by Microsoft to alleviate concerns that it would monopolise the gaming sector, the FTC will have a difficult time persuading a judge to reject the agreement.
The first day of a trial at the FTC’s internal administrative court is set for August 2.

 

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