A positive decision in California, the start of cooperation with the British competition authority: Microsoft saw on Tuesday that the horizon was clearing in its plan to take over the US video game manufacturer Activision, which had been caught in the net of the regulatory authorities.
A federal judge in California initially dismissed the US Federal Trade Commission’s (FTC) request for an immediate stay of the takeover, giving the US government a first setback in this case.
The ruling, dated Monday and released Tuesday, addresses only the urgent procedure initiated by the FTC and does not address the merits of the case, which will be decided at a later date. In that case, a hearing is scheduled for late August.
The competition authority had initiated this process, in summary, on the basis of press articles “indicating that (Microsoft and Activision) are seriously considering completing the acquisition,” despite opposition from several regulators, the document, filed in mid-June, said.
In addition to the FTC, its UK counterpart – the CMA – also vetoed the marriage on behalf of competition in the “cloud gaming” market (video games played remotely without downloading).
But Microsoft President Brad Smith announced on Tuesday that the company would make proposals to the CMA to try to “acceptably address its concerns” about the acquisition of Activision.
“We stand ready to review any proposal by Microsoft to modify the transaction,” the CMA told AFP.
As a sign of appeasement, Microsoft has decided to stay the case in the UK courts against the regulator’s original veto, which was due to be the subject of an appeal hearing at the end of July.
According to CNBC, the Redmond, Washington-based group has proposed “minor” asset sales in order to get the green light from the CMA.
The European Commission approved this acquisition in May.
The computer giant would become the industry’s third-biggest player globally, with a transaction value of $69 billion, according to the estimate released when it was first announced in January 2022.
snub
If only a summary decision, the recitals of the California ruling constitute a snub to the FTC and bode a difficult legal course for the regulator.
“The FTC has not established that it can show that this transaction is likely to reduce competition in this industry,” wrote federal judge Jacqueline Scott Corley.
“We are grateful to the court in San Francisco for this quick and thorough decision and hope that other jurisdictions will continue to work for a speedy resolution of the ongoing disputes,” the Microsoft boss responded in a press release, thereby reaffirming the will of the group should “respond to the concerns of the regulators”.
“We are disappointed with this decision given the clear threat this merger poses to online gaming, subscription services and consoles,” FTC spokesman Douglas Farrar told AFP.
“In the coming days we will announce the next step in our fight to preserve competition and protect consumers,” he added.
Joe Biden’s administration has taken a much more aggressive stance on protecting competition than most of its predecessors, with a mixed record so far.
In particular, at the end of October he had the takeover of the publishing giant Simon & Schuster blocked by its competitor Penguin Random House, and more recently the end of the alliance between the airlines JetBlue and American Airlines.
He had previously pushed insurance brokers Aon and Willis Towers Watson to break up their union in 2021.
On the other hand, it was dismissed in several other cases, notably Booz Allen Hamilton’s takeover of EverWatch Corp in the defense industry or Meta’s (Facebook) takeover of virtual reality specialist Within Unlimited.