Unraveling the Microsoft acquisition of Activision Blizzard

Microsoft's efforts to acquire the American video game company Activision Blizzard, which has been tangled in regulatory issues, saw some progress on Tuesday with a favorable decision in California and the beginning of cooperation with the UK Competition Authority.

A federal judge in California rejected the request of the US competition watchdog to impose an immediate halt on the acquisition process, marking an initial setback for the United States government in this case.

The ruling, issued on Monday and published on Tuesday, only pertains to the expedited procedures filed by the Federal Trade Commission and not the substantive case that will be considered later. A hearing in this case is scheduled for the end of August.

The US competition watchdog had urgently requested a federal court in San Francisco to temporarily suspend Microsoft's acquisition of Activision Blizzard based on newspaper articles that circulated "indicating that Microsoft and Activision are seriously considering completing the acquisition." Despite this action and the ban issued by the UK authority, according to the complaint document filed in mid-June.

The UK Competition Authority also objected to the deal, considering that it harms competition in the cloud gaming sector.

However, Microsoft CEO Brad Smith announced on Tuesday that the group would submit proposals to the UK Competition Authority in an effort to "address their concerns" regarding the acquisition of Activision in an "acceptable" manner.

The authority confirmed to Agence France-Presse its readiness "to consider any proposals from Microsoft to amend the deal."

As a gesture of goodwill, Microsoft decided to suspend the appeal it filed before the British courts to challenge the primary objection of the regulatory authority. A hearing for this appeal was scheduled for the end of July.

According to CNBC, Microsoft has proposed "secondary" stock sales to gain approval from the authority.

The European Commission approved Microsoft's acquisition of Activision Blizzard in May of last year.

The European Commission also approved the deal, which was estimated at $69 billion and would make the American giant the third-largest company in the video game industry worldwide.

Disregard -

Although the decision by the California court is only a temporary decision by the expedited judicial process, its reasoning showed disregard for the Federal Trade Commission and signals a challenging legal path for the regulatory authority.

Federal Judge Jacqueline Scott Corley justified her decision by stating that "the Federal Trade Commission did not demonstrate its ability to prove the likelihood of this deal limiting competition in this sector."

Microsoft's CEO expressed gratitude in a statement, stating, "We appreciate the swift and thorough decision of the San Francisco court," and hoping for the "continued work of other judicial authorities towards a quick resolution" of the ongoing disputes. He emphasized the group's determination to dispel the concerns of regulatory bodies.

Douglas Farrar, spokesperson for the Federal Trade Commission, told Agence France-Presse, "We are disappointed with this decision due to the clear danger that this merger poses to competition in online gaming, subscription-based services, or through gaming consoles."

He added, "In the coming days, we will announce the next steps in our fight to preserve competition and protect consumers."

The administration of President Joe Biden has taken a stricter stance on competition protection than most of its predecessors.

It has already managed to prevent the acquisition of Simon & Schuster by its competitor Penguin Random House at the end of October, as well as terminate the alliance between JetBlue and American Airlines. However, it has not succeeded in several other cases.

 

AFP