Update: FTC Requests Temporary Restraining Order
The Federal Trade Commission (FTC) has confirmed that it has requested a "temporary restraining order" to prevent the Microsoft-Activision Blizzard deal from proceeding while reviews are underway.
Original Story
Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard has received a mixed response from regulators around the world, but the Federal Trade Commission (FTC) may be its biggest critic. The agency has reportedly applied for an injunction to prevent the deal going ahead before its own official judgment on the situation later this year.
Background
Microsoft announced its intention to buy the gaming giant early last year as a way to bolster its own Xbox and PC gaming division, which has struggled to outplay perennial rival Sony. This was followed by a flurry of concerned statements from antitrust regulators around the world, who said industry consolidation like this produces few benefits and plenty of risks for consumers.
Regulatory Challenges
Several investigations are underway, and the U.K. has even moved to block the deal, though that is being appealed in court there. The FTC already had a lawsuit challenging the acquisition, but that is not scheduled to be heard by its own administrative law judge until August. So the agency is reportedly asking for an injunction against the deal now – essentially, asking a judge to pre-judge whether the lawsuit is likely to succeed, whether harm could occur during the legal process, and if so prevent the deal from going forward in the meantime.
FTC’s Concerns
The FTC did have a closed-door meeting this morning for "consideration of a nonpublic law enforcement matter," which very well could be the matter in question. Such decisions generally require the case to be pretty clear, though, and this one may not be. When it filed the lawsuit, the FTC said ‘we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.’
Misconceptions about Activision Blizzard
To call Activision Blizzard an "independent game studio" is something of a stretch: The enormous conjoined corporation is responsible for some of the world’s most popular games, including Diablo IV, which just set launch sales records last week – across all platforms, it must be said. And Microsoft has been careful to state its support for multiple platforms on many of its own marquee titles since the acquisition announcement.
Timeline and Next Steps
The FTC has not provided a timeline for when it expects to make a decision on the deal. If the agency’s request for an injunction is granted, it would likely prevent Microsoft from completing the acquisition while the lawsuit is ongoing. However, if the judge denies the injunction, the deal could still proceed.
Expert Analysis
Industry experts have expressed concerns about the potential impact of the deal on competition in the gaming market. "This acquisition has the potential to create a monopoly in the gaming industry," said John G. Smith, a antitrust expert at Harvard Law School. "Microsoft and Activision Blizzard are two of the largest players in the industry, and if they combine forces, it could stifle innovation and reduce consumer choice."
Conclusion
The FTC’s request for an injunction is just the latest development in a long and complex process. While Microsoft and Activision Blizzard have maintained that they will not close the deal until all regulatory reviews are complete, the FTC’s move suggests that the agency remains skeptical about the acquisition. The outcome of this case will have significant implications for the gaming industry and consumers worldwide.
Related Stories
- FTC Sues to Block Microsoft-Activision Deal: The Federal Trade Commission has filed a lawsuit to block Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard.
- Microsoft-Activision Deal Faces Regulatory Scrutiny: Regulators around the world are scrutinizing Microsoft’s proposed acquisition of Activision Blizzard, with several investigations underway.
- Gaming Industry Experts Weigh In on Microsoft-Activision Deal: Industry experts have expressed concerns about the potential impact of the deal on competition in the gaming market.
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