June 12 (Portal) – The Federal Trade Commission on Monday ordered a court to temporarily block Microsoft Corp’s (MSFT.O) acquisition of Activision Blizzard (ATVI.O) to prevent the deal from closing before the Government files lawsuit against $69 billion deal is heard.
The FTC said Microsoft and Activision signaled the deal could be finalized as early as Friday and asked a federal judge to block any definitive agreement before June 15, 11:59 p.m. ET.
The FTC said the deal, which would be Microsoft’s largest and the largest in video game industry history, would give Microsoft “the ability and greater incentive to withhold or degrade Activision’s content in a way that significantly reduces competition.” “.
The FTC said without action from a judge, the combined company could “change Activision’s operational and business plans” and allow the software giant access to confidential business information.
The FTC, which enforces antitrust laws, asked an internal administrative judge back in early December to block the transaction on antitrust grounds, saying it would give Microsoft’s Xbox exclusive access to Activision games and Nintendo (7974.T) consoles and Sony Left Group Corp’s PlayStation (6758.T) out in the cold.
Microsoft’s bid to acquire video game maker Call of Duty in a $69 billion deal was approved by the EU in May, but UK competition authorities blocked the takeover in April.
The Microsoft logo is seen on a smartphone placed over the displayed Activision Blizzard logo in this January 18, 2022 imagery. Portal/Dado Ruvic/Illustration
Microsoft shares ended Monday up 1.5%, while Activision fell 0.8%.
“We welcome the opportunity to present our case in federal court,” Microsoft President Brad Smith said in a statement. Activision did not comment.
Microsoft has said the deal would benefit gamers and gaming companies alike, and is offering to sign a legally-binding decree of consent with the FTC to offer “Call of Duty” games to competitors like Sony for a decade. When Microsoft announced the deal in January 2022, Microsoft said it expects it to close in fiscal 2023, which ends in June.
An FTC spokeswoman said: “In light of this, and the public news that Microsoft and Activision Blizzard are considering closing their deal soon, we have filed a request for an injunction to prevent them from closing the deal pending review.” ongoing.”
The case reflects the tough approach taken by US President Joe Biden’s administration to antitrust enforcement.
However, antitrust experts say the FTC faces an uphill battle to convince a judge to block the deal, as Microsoft made voluntary concessions to allay fears the company could dominate the gaming market.
A trial before the FTC’s internal administrative court is scheduled to begin on August 2.
Reporting by Rami Ayyub and David Shepardson in Washington; Adaptation by Doina Chiacu, Nick Zieminski, Conor Humphries and Anna Driver
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