The Federal Trade Commission (FTC) has resurrected its legal challenge against the monumental $69 billion acquisition of gaming juggernaut Activision Blizzard by Microsoft. Filed on Wednesday, the revived lawsuit is set to proceed through the commission’s administrative court. This development comes on the heels of the UK’s Competition and Markets Authority (CMA) signaling its near approval of the acquisition.
The FTC’s renewed challenge stands as the final significant obstacle preventing Microsoft from finalizing the deal with Activision Blizzard. “The Commission has determined that the public interest warrants that this matter be resolved fully and expeditiously. Therefore, the Commission is returning this matter to adjudication,” the FTC’s filing affirms.
Having initially withdrawn its administrative challenge in July following a loss in a preliminary injunction lawsuit to halt the acquisition, the FTC was left with the CMA as the sole potential impediment to the transaction’s completion. However, in a recent turn of events, UK regulators, amenable to a revised proposal, concluded their evaluation of Microsoft’s adjusted terms. They expressed satisfaction with concessions made by Microsoft, notably the transfer of Activision’s European cloud gaming division to French firm Ubisoft.
With this latest development, Microsoft’s acquisition of the renowned “Call of Duty” publisher finds itself in a state of uncertainty once more, as the FTC gears up for a fresh confrontation with the tech giant. Even though the company could go ahead and execute the acquisition, the FTC retains the authority to contest the legality of the merger post-closure.
The commission has outlined its plan to initiate the administrative challenge 21 days subsequent to a ruling from the 9th Circuit Court of Appeals on the agency’s objection to the lower court’s denial of its injunction request. FTC spokesperson Victoria Graham emphasized, “The FTC continues to believe this deal is a threat to competition and we are placing this matter on the Commission’s Part 3 calendar ahead of our ongoing federal court appeal, but our current focus is on the federal appeal process,” in a statement provided to Yahoo Finance.
Microsoft, undeterred by the revived legal challenge, remains resolute in its intent to conclude the transaction by October 18. A spokesperson for Microsoft stated, “We still anticipate that we will close the transaction by October 18, and we have full confidence in our case and the deal’s benefits to gamers and competition.”
Should Microsoft successfully navigate the renewed challenge of FTC and integrate Activision Blizzard, it would emerge as the third-largest video game company by revenue, trailing only Tencent and Sony.
At the core of the FTC’s argument lies the burgeoning cloud gaming industry, wherein Microsoft holds a prominent position courtesy of its Xbox Cloud Gaming platform, accessible through the GamePass gaming subscription service.
Source: Yahoo Finance
