UK Court Urged to Temporarily Halt Microsoft’s Acquisition of Activision Blizzard

The Federal Trade Commission (FTC) has made a plea to a UK court to intervene and temporarily block the impending acquisition of Activision Blizzard by Microsoft Corporation. The FTC aims to prevent the $69 billion deal from closing before the government has the opportunity to present its case against the acquisition.

Reports indicate that Microsoft and Activision Blizzard were prepared to finalize the deal as early as Friday, prompting the FTC to urgently request a federal judge to intervene and halt any final agreements prior to 11:59 p.m ET on June 15.

The FTC has expressed concerns that this acquisition, being the largest in Microsoft’s history and the largest ever in the video game industry, would provide Microsoft with increased power and incentive to manipulate or degrade Activision’s content in ways that significantly hamper competition.

Highlighting the urgency of the matter, the FTC stated that if left unchecked, the merged entity could potentially disrupt Activision’s operations and business plans, while also granting Microsoft access to sensitive proprietary information.

The FTC, responsible for enforcing antitrust laws, had previously sought to block the transaction on antitrust grounds in December, requesting an administrative judge to intervene. The argument put forth by the FTC was that the acquisition would give Microsoft’s Xbox exclusive access to Activision games, thereby leaving Nintendo consoles and Sony Group’s PlayStation at a disadvantage.

While the European Union granted approval for Microsoft’s bid to acquire Activision Blizzard in May, British competition authorities had already blocked the takeover in April, raising significant concerns about the impact on the gaming industry.

Shares in Microsoft closed up by 1.5% on Monday, while Activision Blizzard witnessed a decline of 0.8%.

Microsoft President, Brad Smith, expressed his appreciation for the opportunity to present their case in federal court, stating, “We welcome the opportunity to present our case in federal court.” On the other hand, Activision Blizzard declined to comment on the matter.

Microsoft has asserted that the acquisition would be mutually beneficial for gamers and gaming companies alike. In an effort to address concerns, Microsoft has offered to sign a legally binding consent decree with the FTC, promising to provide “Call of Duty” games to competitors, including Sony, for the next ten years. Microsoft initially announced the deal in January 2022, with expectations that it would be finalized during their 2023 fiscal year, ending in June.

Responding to the situation, an FTC spokesperson said, “In light of that, and public reporting that Microsoft and Activision Blizzard are considering closing their deal imminently, we have filed a request for a temporary restraining order to prevent them from closing while review continues.”

This case represents the robust antitrust enforcement approach adopted by the administration of U.S. President Joe Biden. However, antitrust experts believe that the FTC faces a challenging task in persuading a judge to block the acquisition due to the voluntary concessions offered by Microsoft, aimed at allaying concerns about potential market dominance.

The trial at the FTC’s administrative court is scheduled to commence on August 2, where the fate of the Microsoft-Activision Blizzard acquisition will be closely scrutinized.

Sam Allcock
Sam Allcock
Founder | Head of PR At Nerd Bite, we are lucky to have Sam on our team. He is an expert in online PR, social media strategy, e-commerce, and news websites, with a wealth of knowledge that makes him a valuable asset. Sam's experience and skills have helped us deliver successful campaigns for clients and stay ahead of the competition. With his contributions, we are confident that we will continue to provide high-quality content and services to our readers and partners.

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