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What happens to Microsoft and Activision Blizzard post-FTC?

Bynewsmagzines

Jul 12, 2023
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Judge Jacqueline Scott Corley has issued her ruling in the case of the Federal Trade Commission’s temporary injunction against Microsoft’s acquisition of Activision Blizzard. She ruled against the injunction, which dissolves on July 14. This begs the question: What will happen for both Activision Blizzard (and the FTC) in the immediate aftermath?

Xbox head Phil Spencer and Microsoft president Brad Smith both expressed their approval of the decision. Spencer said in a tweet, “We’re grateful to the court for swiftly deciding in our favor. The evidence showed the Activision Blizzard deal is good for the industry and the FTC’s claims about console switching, multi-game subscription services, and cloud don’t reflect the realities of the gaming market.”

Smith gave a statement on behalf of Microsoft, “We’re grateful to the Court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution. As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”

Activision Blizzard CEO Bobby Kotick said in an email to employees, “The U.S. joins the 38 countries where our deal can proceed—these decisions are based on facts and data that show our merger is good for players and for competition in the industry.”

Industry-wide reactions

Aside from the official reactions from Microsoft and Activision Blizzard, several figures within the industry have reacted positively to the news that the acquisition is no longer stymied by the FTC. They also expressed hopes of certain Activision Blizzard titles being revived or coming to Xbox Game Pass.

That being said, there’s an equally vehement dissenting opinion, that being that Microsoft buying Activision Blizzard will harm gamers by consolidating too large a company under a major publisher. There was also some disappointment in the FTC for not making an adequate enough case to convince Judge Corley.

Still others pointed out that Activision Blizzard’s stock spiked in response to the news. The company stock went up by 10% following the announcement, where it remained at day’s close.

What comes next

The FTC still has the option to appeal Judge Corley’s decision, though it will have to do so before the injunction dissolves on July 14. If it doesn’t do so, then Microsoft can complete the acquisition unopposed, at least in the U.S.

As for Microsoft, it has exactly one week to close the deal before its deadline. The next hurdle to cross will be the U.K.’s Competition and Markets Authority. The CMA had expressed opposition to the acquisition, but in the wake of the FTC judgement, it has allegedly paused its own injunction in favor of negotiating with the company. According to a statement given to VGC, the CMA said, “We stand ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our Final Report.”

Regulatory bodies in Brazil, South Africa, Japan and China have already approved the acquisition. The U.S. and U.K. are at present the only countries who have opposed it, though Canada’s Competition Bureau has also expressed reservations about the deal and said it was “likely to result in a substantial prevention and/or lessening of competition with respect to gaming consoles and multigame subscription services.”

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