The UK said no, the European Union (EU) said yes, and the US is once again trying to fight back: Microsoft’s $68.7 billion acquisition of Activision Blizzard still doesn’t shine, a year and a half after it was announced to be nearing completion.
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The US competition authority FTC on Monday applied to a federal court in San Francisco for a temporary suspension of operations, according to the summary seen by AFP.
The European Commission approved the deal last month, which would make the computer giant the world’s third largest video games company, while its UK counterpart vetoed it on behalf of competition in the dematerialized (cloud) gaming market.
The FTC had already initiated administrative proceedings to determine the risks associated with this acquisition, and a hearing is scheduled for early August. However, press articles circulated “indicating that despite this proceeding,[Microsoft and Activision]are seriously considering completing the acquisition.” The British authority stated the ban on the CMA in its summary on Monday.
“The proposed transaction would allow Microsoft to continue to take control of high-quality video games,” the FTC argues.
“By controlling Activision’s content, Microsoft could and would have an incentive to withhold that content or downgrade its quality in a way that weakens competition, including on quality, price and innovation,” the federal agency said.
“Compete Better”
Microsoft, which has been marketing Xbox consoles for more than 20 years and owns many studios, assures that this acquisition would, on the contrary, bring more choice to the video game market.
The FTC’s intervention “should expedite the process,” Brad Smith, the company’s president from Redmond, Northwest, responded on Twitter Monday.
“We always favor constructive, consensual methods with governments, but we are confident and look forward to making our case,” he added.
Bobby Kotick, Activision Blizzard’s general manager, also said he “positively welcomes” this boost, which will allow “things to move forward,” according to an email to employees published on the company’s website.
The publisher owns several phenomenal titles played by tens of millions of people, from the shooter Call of Duty, to the Candy Lines exploding on the famous Candy Crush, to Overwatch, which is a dedicated e-sport -Championship has Overwatch League.
According to the boss, the merger would benefit hundreds of millions of gamers, American employees and shareholders (including people who rely on a pension fund for their retirement).
It “allows two American companies to better compete against international competitors that dominate the industry around the world,” he said.
cloud gaming
Tencent and Sony dominate this market in Asia and beyond, thanks in particular to Riot Games, publisher of the worldwide hit “League of Legends” for the Chinese giant, PlayStation consoles for the Japanese company.
Sony was concerned about being denied access to Activision Blizzard’s greatest hits. However, according to the European Commission, “Microsoft would have no interest in refusing to distribute Activision games to Sony, the world’s leading console game distributor”.
Regulators are particularly concerned about the booming market for cloud gaming, ie dematerialized games accessible via streaming on a tablet, smartphone or computer.
But the EU accepted the solutions proposed by Microsoft.
The American concern plans to provide consumers with current and future Activision Blizzard games free licenses that will allow them to play on any device, regardless of the operating system, for a period of 10 years.
With its filing Monday, the FTC hopes a judge will bar the two US companies from completing the acquisition before the court case is complete.
“If the transaction goes through, it will be the largest in the history of the video game industry and also in the history of Microsoft,” the FTC said.