What you need to know
- Microsoft is trying to acquire Activision-Blizzard for $69 billion, with regulators scrutinizing the deal around the world.
- The US Federal Trade Commission (FTC) recently sued to block the merger, citing Microsoft making games like Starfield exclusives as a sign that the company can’t be trusted.
- A new report indicates that the FTC filed a lawsuit to block the Microsoft-Activision merger after learning that the European Union (EU) plans to discuss potential remedy proposals with Microsoft, discouraging it from reaching a settlement.
- Regulators such as the European Union and the UK’s Competition and Markets Authority (CMA) are expected to make their final decisions in April 2023.
Update 1/27/23 at 1:45 PM ET: The European Union’s antitrust watchdog responded to Bloomberg’s request for comment, declining to comment beyond confirming that its “investigation into the deal continues.”
Our original story below.
As Microsoft continues its efforts to secure its largest acquisition ever, the Activision-Blizzard merger faces close and thorough scrutiny from regulators around the world. One organization, the US Federal Trade Commission (FTC), recently sued to block a $69 billion deal in December, citing Microsoft’s decision to make upcoming games like Starfield and Redfall exclusive to Xbox and PC as a reason for the company’s untrustworthiness. (The other organizers He claimed that the FTC was inaccurate Since Microsoft has never committed to keeping ZeniMax games cross-platform).
But, New report He points out that the FTC chose to present its case when it did so in order to rig the European Union (EU), a fellow regulatory body also scrutinizing the acquisition. According to Bloomberg, the FTC moved to block the merger on December 8 in a direct response to EU officials indicating they were planning to discuss possible remedies with Microsoft. This information was shared via a call between the two agencies hours before the lawsuit was filed.
Sources familiar with the investigations said the FTC lawsuit was a clear message to the European Union that the US regulator did not want to reach settlements with Microsoft. This happened despite the fact that the EU would not consider possible solutions until a later date.
Barry Nigro said the FTC was able to “get out there in front of the Europeans trying to shape the narrative” through fast registration. Previously, Nigro was the Department of Justice’s No. 2 Antitrust Officer as the principal deputy assistant attorney general. Currently, he leads the global antitrust and competition department at Fried, Frank, Harris, Shriver, & Jacobson LLP.
Reportedly, the FTC declined to comment, and the EU did not respond to inquiries on the matter either. Microsoft repeated President Brad Smith’s statement earlier that “even with confidence in our case, we remain committed to creative solutions with regulators that will protect competition, consumers and those in the technology sector.”
Final decisions from regulators such as the European Union and the UK’s Competition and Markets Authority (CMA) are expected in spring 2023, with the two organizations planning to deliver their rulings on April 11 and April 26, respectively. The CMA is also expected to announce a preliminary decision in late January or sometime in February.
Microsoft has tried to allay regulators’ concerns about exclusivity several times in the past, with stated Phil Spencer, CEO of Microsoft Gaming The main draw for Activision-Blizzard for Microsoft is its leading position in the mobile gaming space. Spencer said Microsoft wants to “be where gamers are, especially with franchises the size of Minecraft and Call of Duty.” As a sign of good faith, The company has also entered into a 10-year commitment to bring Call of Duty to Nintendo Switch and Steam. this deal It was reportedly offered to Sony for PlayStation as wellalthough no agreement was reached.
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In my view, the FTC’s course of action is incredibly reckless and premature. While the committee’s concerns about Activision Blizzard’s game exclusivity are understandable, it’s hard to believe the FTC really cares about anything other than political hyperbole. As my colleague Jez Corden books Earlier this month, its actions reeked of a vague “bad big tech” attitude that failed to consider the acquisition from all angles. as we are I wrote about it beforeThere are a variety of ways in which a deal can be beneficial to players.
Ultimately, the contrast between the FTC’s approach and that of the European Union could not be starker. While the European Union no doubt has its concernsthe fact that in fact trying to solve it Microsoft points out that it is doing what a regulator is supposed to do: think carefully about the merger and work to ensure that it will help consumers, not harm them. Meanwhile, the FTC has run its way into a full-blown lawsuit, complaining about ZeniMax exclusives that Microsoft never said it would make for multi-platform in the first place and manipulating the EU to try to prevent a settlement from developing.
So, does the FTC Is that true Care about consumers who will be affected by this deal? So far, I think the answer is a clear no. And that answer won’t change until you start acting in good faith.