In a stunning turn of events, the gaming industry was recently rocked by a high-stakes legal battle as the Federal Trade Commission (FTC) attempted to halt Microsoft’s acquisition of Activision Blizzard, one of the largest and most influential gaming companies in the world. After a heated courtroom battle, the appeals court decisively rejected the FTC’s last-ditch efforts, giving the green light for the acquisition to proceed. This landmark decision has far-reaching implications for the gaming industry and could reshape the landscape of interactive entertainment as we know it.
The Federal Trade Commission’s attempt to halt Microsoft’s $68.7 billion acquisition of Activision Blizzard has been unsuccessful. The Ninth Circuit Court of Appeals has denied the agency’s emergency stay request, allowing the deal to proceed in the US. The only remaining obstacle is a UK regulator. Last month, a temporary restraining order was in place, preventing the acquisition from being finalized until a ruling on the FTC’s preliminary injunction request. When the request was rejected, the FTC had until a specific deadline to obtain an emergency stay, which they did not meet. Microsoft and Activision can now proceed with closing the deal. Microsoft’s president and vice-chair, Brad Smith, expressed gratitude for the swift response and stated that this brings them closer to the finish line in the global regulatory reviews.
In the ongoing battle between the Federal Trade Commission (FTC) and Microsoft and Activision Blizzard, things have taken an interesting turn. The FTC had previously failed to prove its claims that the merger would harm consumers, leading to an appeal from the commission. The FTC then requested an injunction to halt the merger while the appeal process takes place, but this motion was swiftly denied by the court.
Originally, the FTC sued to block the deal, citing concerns about competition. An administrative hearing has been scheduled for August in relation to the case. The FTC had hoped to secure a preliminary injunction to prevent the merger from going ahead until the antitrust trial is completed. However, the merger deadline is set for July 18th.
Despite these legal challenges, Microsoft and Activision Blizzard seem confident that they will be able to close the deal by the deadline. Activision’s stock is due to be delisted from the Nasdaq-100 index, indicating that they believe the merger will finally be sealed. If the deadline is not met, the companies will need to renegotiate the terms or agree to extend the timeline. However, it seems unlikely that Activision would choose to walk away from the deal and instead receive a $3 billion breakup fee from Microsoft, as both companies are eager to join forces.
One hurdle that Microsoft and Activision still face is gaining approval from a UK regulator, which currently stands in the way of the deal due to concerns about cloud gaming. Microsoft has appealed this decision, but for now, the legal battle has been put on hold. The Competition Appeal Tribunal (CAT) will decide on July 17th if this pause will take effect.
The UK regulator has stated that restructuring the deal is an option for Microsoft and Activision, but warns that this may trigger a new merger investigation. The regulator has extended its deadline for making a decision until the end of August to allow for a thorough review of Microsoft’s submission. However, the goal is to reach a conclusion as quickly as possible. There have been reports suggesting that Microsoft may sell some of its cloud gaming rights in the UK in order to move the deal forward.