Title: How the FTC’s Suit Against Microsoft’s Acquisition of Activision Blizzard is Shaping the Future of Antitrust Regulation
Microsoft’s $75 billion acquisition of Activision Blizzard, the gaming industry’s largest deal, is facing new challenges after the Federal Trade Commission (FTC) filed a court request to halt the transaction. The FTC had earlier sued to block the deal, but the new request filed in a California federal court seeks to stop the deal from closing before a decision is made. The regulator alleges that the acquisition would give Microsoft more control over Activision’s valuable content, leading to reduced competition in terms of product quality, price, and innovation.
Bobby Kotick, the CEO of Activision, called the request a welcome update that would speed up the legal process. He added that the filing would allow the companies to present the facts about their merger more quickly. Brad Smith, the Vice President and Chairman of Microsoft, expressed the company’s willingness to present its case in federal court, saying that it would bring more choice and competition to the marketplace.
The FTC’s challenge against the deal is seen as one of the highest-profile antitrust cases brought by the Biden administration, which has appointed antitrust officials keen on cracking down on anticompetitive conduct in the US economy. The UK’s Competition and Markets Authority blocked the deal in April, arguing that Microsoft could make Activision’s games exclusive to its cloud gaming service. However, the European Union allowed the acquisition, saying that Microsoft had eased its concerns.
Despite the FTC’s handling of the deal raising concerns among American companies that antitrust policies would become more interventionist, experts agree that the case exposes antitrust challenges companies can face from multiple jurisdictions. With the potential for multijurisdictional antitrust regulators to file for premerger investigations from across the globe, businesses need to consider regulatory landscapes carefully before entering global transactions.
Furthermore, the lawsuit highlights the importance of being proactive in meeting regulatory compliance requirements, as opposed to taking a wait-and-see approach. Companies that are willing to invest the time and resources to understand and comply with regulatory requirements in different legal systems can avoid costly legal battles such as the one faced by Microsoft and Activision Blizzard.
In conclusion, the FTC’s suit against Microsoft’s acquisition of Activision Blizzard has raised the bar for antitrust regulation. Companies need to be proactive in meeting regulatory compliance requirements and anticipate regulatory challenges before engaging in global transactions. As antitrust regulators from multiple jurisdictions continue to press businesses on their deals’ anticompetitive effects, companies must be vigilant in avoiding legal battles that could jeopardize their acquisition efforts.
Summary:
The FTC has filed a court request to stop Microsoft’s $75 billion acquisition of Activision Blizzard.
The regulator alleges that the acquisition would give Microsoft more control over Activision’s content, leading to reduced competition in terms of product quality, price, and innovation.
The FTC case exposes antitrust challenges that companies can face from multiple jurisdictions.
Companies need to consider regulatory landscapes carefully before entering global transactions.
The lawsuit highlights the importance of being proactive in meeting regulatory compliance requirements.
Companies that are willing to invest in understanding and complying with regulatory requirements in different legal systems can avoid costly legal battles.
The suit against Microsoft’s acquisition of Activision Blizzard has raised the bar for antitrust regulation.
Companies must be vigilant in avoiding legal battles that could jeopardize their acquisition efforts.
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The US Federal Trade Commission has asked a federal court to stop Microsoft from closing its $75 billion acquisition of Activision Blizzard, in a move that adds pressure on the gaming industry’s biggest deal.
The antitrust last year sued to block the transaction through its own internal legal process, which is expected to begin in August. But it filed a separate request in a California federal court on Monday to prevent Microsoft from closing the deal before a decision is handed down. Challenging a deal is more difficult after it has been completed.
The FTC has asked the court to rule by Thursday on his request for a temporary restraining order.
“The proposed acquisition would continue Microsoft’s model of taking control of valuable gaming content,” the FTC said in the filing. “With control of Activision’s content, Microsoft would have the ability and greater incentive to retain or degrade Activision’s content in ways that substantially reduce competition, including competition on product quality, price and innovation.”
Bobby Kotick, CEO of activisionwhich makes the game series successful call of Duty, he said in an email to employees on Monday: “This is a welcome update and one that expedites the legal process. We will now have the opportunity to present the facts about our merger more quickly.”
Before filing in court, Brad Smith, vice president and chairman of Microsoft, said: “We welcome the opportunity to present our case in federal court. We believe that accelerating the legal process in the US will ultimately bring more choice and competition to the marketplace.”
The regulator’s move against the Microsoft deal is seen as one of the highest profile challenges brought by the Joe Biden administration. The president has appointed a number of progressive antitrust officials eager to crack down on what they perceive as anticompetitive conduct in the US economy, including Lina Khan, chair of the FTC.
This was decided by the UK Competition and Markets Authority to block the deal in April, putting the acquisition in serious jeopardy. The CMA argued that Microsoft could make Activision’s games exclusive to its cloud gaming service.
In a break from the UK and the US, the EU last month deleted the acquisition, saying Microsoft has eased its concerns.
The FTC said on Monday that the agency had filed the new complaint due to reports that the companies were considering closing the “imminent” deal.
In a interview with the FT in February, Activision’s Kotick complained that “ideologists” who believed that “big is bad” were taking over competition regulators.
Activision was surprised by the FTC’s decision to sue to stop the deal in December, it said, because “no one would have expected that ideology would get in the way of the opportunity.”
The FTC’s handling of the deal has heightened concerns among American companies that Khan is ushering in a more interventionist antitrust policy. Suzanne Clark, chief executive officer of the U.S. Chamber of Commerce, cited the agency earlier this year as an example of “unprecedented regulatory overload,” which she promised the business lobby would fight back in court.
https://www.ft.com/content/c460fed9-bb17-4ef2-bd41-aaad227dd3a2
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