Federal Trade Commission Clamps Down on Microsoft’s Activision Blizzard Acquisition Attempt

Written by Judith
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    FTC fights to halt Microsoft’s acquisition of Activision Blizzard amid concerns of market competition and dominance. Learn more about this high-stakes legal battle.

    Key Takeaways:

    • The FTC is ramping up its efforts to prevent Microsoft from acquiring Activision Blizzard, seeking a temporary restraining order and an injunction.
    • The US court now faces the crucial decision of whether to issue the temporary restraining order and the preliminary injunction.
    • If the deal falls through, Microsoft could owe Activision Blizzard a termination fee worth up to $3 billion.

    The FTC Steps Up to Halt Microsoft’s Big Move

    The Federal Trade Commission (FTC) is escalating its efforts to halt the merger between tech giant Microsoft and gaming corporation Activision Blizzard. This action comes amidst the broader legal battle the FTC is waging to prevent the acquisition.

    The FTC’s initial legal challenge was launched in December, but now it’s ramping up the stakes, seeking a temporary restraining order and injunction from a US federal district court. The reason? Both Microsoft and Activision have indicated that they could move ahead with the proposed acquisition at any given moment.

    The Clock is Ticking, but FTC is on the Alert

    As the deadline for the deal approaches, the FTC’s move shows concern that Microsoft might go ahead with the acquisition, irrespective of UK regulators’ block. This worry is heightened by the fact that European regulators gave the deal a green light last month.

    Microsoft is also appealing against the decision of UK regulators to block its proposed acquisition. Given the impending appeal and rumors of the potential closing of the deal, the FTC is working swiftly to secure an injunction.

    The Court’s Decision and its Impact on the Acquisition

    Now, the US court has to make a critical decision. It must decide whether to issue a temporary restraining order that would prohibit Microsoft from finalizing the deal for two weeks and a preliminary injunction that would stop the closure until the FTC’s legal challenge results are out.

    There is an evidentiary hearing scheduled for August 2nd, shortly after Microsoft’s appeal hearing is due to commence in the UK. The outcomes of these hearings could shape the future of the gaming industry.

    Microsoft Remains Optimistic and Eager for Legal Progress

    Despite the legal hurdles, Microsoft expresses an eagerness to fast-track the FTC case. Brad Smith, Microsoft’s vice chair and president, highlights that “accelerating the legal process in the US will ultimately bring more choice and competition to the market.”

    Activision Blizzard CEO Bobby Kotick echoes this sentiment, suggesting that the recent legal moves are a “positive development in our merger progress” because it hastens the legal process.

    The Fears and Future of the Gaming Industry

    The FTC’s fears revolve around the potential power dynamics after the merger. It worries that Microsoft, with Activision under its wing, might be able to manipulate gaming products through price, quality, or withholding content from competitors.

    As Microsoft tries to navigate these legal challenges, it must also grapple with the fact that if the deal falls apart, a termination fee worth up to $3 billion could be owed to Activision Blizzard.

    Judith