The U.S. Federal Trade Commission (FTC) is appealing a federal judge’s ruling handed out on Tuesday which will allow Microsoft to go forward with its $69 billion acquisition of video game publisher Activision Blizzard.
U.S. District Judge Jacqueline Scott Corley denied a preliminary injunction request sought by the FTC, saying that “The Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition.”
In fact, she says: “To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content”. The decision has already spurred legal debate amongst U.S. antitrust lawyers on social media.
A temporary restraining order keeping Microsoft from making the acquisition expires on Friday at midnight US West Coast time unless the U.S. 9th Circuit Court of Appeals grants an emergency stay.
The current merger agreement expires next Tuesday (July 18th), after which either company will be free to walk away from the deal unless they negotiate an extension. If the merger goes through, it will make Microsoft one of the largest video game developers in the world.
Shortly after the judge’s ruling, Britain’s Competition and Markets Authority (CMA), which had opposed the transaction, said a restructured deal between Microsoft and Activision Blizzard could satisfy its concerns subject to a new investigation into changes made by Microsoft intended to obtain approval of the merger.
As a result, a CMA spokesperson says: “In order to be able to prioritise work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of litigation in the UK would be in the public interest, and all parties have made a joint submission to the Competition Appeal Tribunal to this effect.”
Microsoft president Brad Smith in a statement: “After today’s court decision in the U.S., our focus now turns back to the UK. While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA.”
A follow-up report at CNBC indicated that Microsoft has offered a ‘small and discrete divestiture’ to address the cloud gaming concerns – an offer the CMA hasn’t necessarily accepted as yet. Said divestiture will likely be specific to the UK and could see changes to Microsoft’s Xbox Cloud Gaming services in the region.
Source: The Verge
