A United States appeals court delivered a blow to the Federal Trade Commission’s (FTC) plea to halt Microsoft’s colossal $69 billion acquisition of Activision Blizzard, the renowned creator of “Call of Duty.”
This decision eliminates one of the few remaining obstacles impeding Microsoft, the mastermind behind Xbox, from finalizing the deal and expanding its empire in the gaming industry.
In a bid to delay the proceedings, the FTC also sought a stay from Judge Jacqueline Scott Corley of the U.S. District Court in northern California, but she promptly dismissed the request on Thursday evening.
Unsurprisingly, the FTC remained tight-lipped when approached for comment, leaving their position unclear and raising speculation about their next move.
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Microsoft’s President, Brad Smith, expressed his gratitude for the swift response from the Ninth Circuit, denying the FTC’s motion to further delay the deal.
Smith emphasized that this triumph propels them one step closer to the finish line in the arduous marathon of global regulatory reviews. He clearly relishes the prospect of cementing Microsoft’s dominance in the gaming landscape, leaving competitors in their wake.
This historic agreement, which stands as the largest in the annals of the videogame industry, still awaits approval in the United Kingdom.
The fate of the deal now hinges on the decision-makers across the pond. In light of the recent rejection, the FTC may choose to withdraw from the fight, as they have done in similar situations in the past.
This pattern emerged most recently in February when the FTC lost the battle against Meta Platforms’ acquisition of virtual reality content producer Within Unlimited, resulting in the FTC’s decision to drop the challenge altogether.
The clock is ticking on the merger agreement between Microsoft and Activision, with an expiration date of July 18 looming ominously.
After this critical date, either party has the freedom to abandon the deal unless they manage to negotiate an extension. Time is of the essence, and the stakes have never been higher.
Across the pond, the Competition and Markets Authority in the United Kingdom has voiced opposition to the transaction, expressing concerns about its potential impact on competition in the burgeoning realm of cloud gaming.
Just recently, Microsoft submitted a “detailed and complex” proposal to address these concerns, causing the authority to extend the deadline for a final ruling to August 29.
However, they made it clear that they would strive to deliver a verdict as expeditiously as possible. The suspense continues to build as the UK authorities ponder the future of this colossal deal.
Within the United States, the FTC staunchly argued that the acquisition would inflict harm upon consumers, regardless of whether they played video games on consoles or subscribed to gaming services.
Their fear was that Microsoft would gain the power to marginalize competitors like Sony Group. In an attempt to pacify these concerns, Microsoft offered 10-year licenses to its rivals.
Despite these efforts, Judge Corley ruled on Tuesday that the deal was lawful under antitrust regulations, dismissing the FTC’s plea for a preliminary injunction to stall the acquisition and grant the FTC more time to present its case before an internal FTC judge in August.
Unyielding in their resolve, the FTC decided to contest the defeat and appealed to the Ninth Circuit Court of Appeals, which ultimately issued its verdict on Friday. T
he FTC had argued that this case went beyond a single video game and the hardware that accompanies it. They claimed it was a pivotal moment for the gaming industry’s future, where the way gamers play and the fate of emerging subscription and cloud markets hung in the balance.
The FTC laid out its case, expressing concerns over the potential consolidation and enclosure of these markets, presenting the appeals court with a vivid depiction of what was at stake.
To alleviate some of the apprehension surrounding their motives, Microsoft recently struck a deal with rival Nintendo, granting them access to Activision’s blockbuster title, “Call of Duty,” contingent upon the successful closure of the acquisition.
Microsoft argued that agreements like this demonstrate their commitment to fair play and debunk any suspicions that they intend to hoard games exclusively for their Xbox platform and subscription service.
In conclusion, the verdict delivered by the appeals court has paved the way for Microsoft’s triumphant acquisition of Activision Blizzard.
The landscape of the gaming industry is on the cusp of a seismic shift, with Microsoft poised to exert its dominance and reshape the future of gaming as we know it. The journey has not been without its challenges, but with each hurdle cleared, Microsoft inches closer to solidifying its status as the unrivaled powerhouse in the gaming world.
As the dust settles, the repercussions of this deal will reverberate throughout the gaming industry, raising questions about competition, market consolidation, and the future of gaming experiences for players worldwide.