Microsoft to close the Activision deal before October 18
FTC withdraw its case against Microsoft-Activision Blizzard.
- Microsoft is trying to purchase the Activision Blizzard company for $69 billion.
- FTC withdraw its case against Microsoft-Activision Blizzard.
- Microsoft and Blizzard have agreed to extend the merger agreement to October 18.
Contrary to the UK’s CMA’s decision to block Microsoft’s $68.7 billion acquisition of Activision Blizzard, the European Union has cleared the deal. The announcement arrived weeks after UK’s decision.
The European Commission has granted approval, subject to certain conditions. This decision comes after an extensive investigation into the potential impact of the merger on competition in the gaming industry. The Commission’s approval is contingent upon Microsoft’s compliance with the commitments it has offered.
During its in-depth investigation, the Commission identified specific areas where the acquisition could negatively affect competition. These included the distribution of console and PC video games, multi-game subscription services, cloud game streaming services, and the supply of PC operating systems.
The Commission found that while the acquisition would not harm competition in the distribution of games for rival consoles or multi-game subscription services, it could potentially impact the market for PC operating systems and cloud game streaming services.
To address these concerns, Microsoft has made comprehensive licensing commitments that will be in effect for ten years. These commitments grant consumers in the European Economic Area (EEA) the right to stream all current and future Activision Blizzard PC and console games through any cloud game streaming service of their choice.
Additionally, EEA-based cloud game streaming service providers will receive a free license to stream Activision Blizzard’s games to gamers within the region. These measures ensure that gamers who have purchased Activision games or subscribed to multi-game services can stream those games using any cloud gaming platform and play them on any device, regardless of the operating system.
Besides that, South Korea’s Fair Trade Commission has also joined the suit and granted its approval for Microsoft’s proposed acquisition of Activision Blizzard. With South Korea becoming the 38th country to support the deal, Microsoft moves closer to solidifying its position as a major player in the gaming world.
The UK has blocked the Microsoft – Activision Blizzard deal
In a press release, the UK’s spokesperson for CMA says that Redmond officials haven’t effectively succeeded in addressing issues in the cloud gaming sector, despite its 10-year binding deals with various publishers like Nvidia (GeForce NOW) and Nintendo back in February this year.
The final decision to prevent the deal comes after Microsoft’s proposed solution failed to effectively address the concerns in the cloud gaming sector, outlined in the Competition and Markets Authority’s (CMA) provisional findings published in February.
The CMA found evidence indicating that it would be advantageous for Microsoft to exclusively offer Activision’s games on its cloud gaming platform, which is already well-established in the industry.
Microsoft’s rival, Sony and its PlayStation consoles has been opposing this deal for long.
Earlier in February 2023, Microsoft boss Brad Smith arrived at a hearing with EU antitrust regulators to smoothen up the tech giant’s attempt to acquire Activision Blizzard.
Activision CEO Robert Kotick represented his company, while Sony, Google, and Nvidia Corp were also present in the hearing.
FTC will also try to block Microsoft’s acquisition of Activision Blizzard
The Federal Trade Commission will file an injunction seeking to block Microsoft from acquiring Activision Blizzard. With the injunction, FTC is seeking to stop the transaction from happening before the deal’s deadline of July 18.
The FTC has already sued this deal, choosing the present the case to its internal administrative law judge. In this trial, the judge is set to make an initial decision that can be appealed to the full commission for a vote. Microsoft could then appeal to a federal court if the decision does not go according to the Redmond-based tech giant.
We welcome the opportunity to present our case in federal court. We believe accelerating the legal process in the U.S will ultimately bring more choice and competition to the market.
Microsoft
Regulators and experts have been warning that the deal, which almost reaches $69 billion, could harm market competition given the stature of Microsoft and prevent innovations.
FTC v. Microsoft hearing and a lot of secrets from the Redmond-based tech giant
The FTC v. Microsoft hearing has revealed a lot of secrets from Microsoft. It seems that Microsoft tried to spend Sony out of business, in order to strengthen Xbox.
In an e-mail from Matt Booty, Microsoft’s Xbox Game Studios chief, he wanted Xbox to pass Sony in game content subscriptions.
In games, Google is 3 to 4 years away from being able to have a studio up and running. Amazon has shown no ability to execute on game content. Content is the one moat that we have, in terms of a catalog that runs on current devices and capability to create new. Sony is really the only other player who could compete with Game Pass and we have a 2 year and 10 million subs lead.
Matt Booty
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Microsoft also considered buying Bungie and Sega to further strengthen Xbox Game Pass, according to the Verge, in a 2020 e-mail from Xbox chief Phil Spencer.
We believe that Sega has built a well-balanced portfolio of games across segments with global geographic appeal, and will help us accelerate Xbox Game Pass both on and off-console.
Phil Spencer
Major update: FTC v. Microsoft is over, and Microsoft has won
According to the latest hearing, Microsoft has won against FTC, and now the Redmond-based tech giant is free to close the Activision-Blizzard acquisition. Xbox head, Brad Smith has released a statement, following the news of Microsoft winning.
According to The Verge, Judge Jacqueline Scott Corley decided to deny the FTC’s request for a preliminary injunction.
Microsoft’s acquisition of Activision has been described as the largest in tech history. It deserves scrutiny. That scrutiny has paid off: Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox. It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements to for the first time bring Activision’s content to several cloud gaming services. This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action. For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.
The UK regulators also agree to pause their battle with Microsoft, and negotiate it, according to The Verge. This means Microsoft can now close the acquisition deal before the July 18th deadline.
We’ll keep you updated on this as we follow the acquisition. But you should know that a lot of Activision-Blizzard titles will be impacted by the deal. Titles such as Diablo, World of Warcraft, and Call of Duty will most likely be at the forefront of this merge, with content coming to them more often.
FTC is striking back
After a judge decided that Microsoft is free to close the Activision-Blizzard deal, FTC appeals its loss in the Microsoft case, The Verge reports.
The appeal makes it clear that FTC won’t back down, even if their case, according to the judge, is not sustainable and the arguments do not hold up. However, by appealing the judge’s decision, FTC will want to call the Ninth Circuit Court of Appeals to issue an emergency stay to extend the existing temporary restraining order (TRO) that is set to expire at 11:59 PM PT on Friday, July 14th, The Verge reports.
It’s not yet clear if the appeal will rule before the deadline on July 18th, meaning that Microsoft can close the Activision Blizzard deal on Monday or Tuesday without a restraining order in place, reports say.
FTC’s bid to block the acquisition gets rejected by judge
Following Microsoft’s win over FTC, the Federal Trade Commission came back to appeal its loss. However, according to the latest reports, the appeal got rejected by Judge Jacqueline Scott Corley, who released a two-sentence order late Thursday.
This means Microsoft is finally free to close the acquisition, before July 18th.
Update: Microsoft to close the Activision-Blizzard deal before October 18
Microsoft and Activision have come to the decision to extend their merger agreement to October 18. This is all due to the pending outcome of the UK negotiations.
If you remember, the UK regulators initially blocked the deal, but they reconsider it after Microsoft won the FTC battle. Brad Smith, Microsoft president, says the next couple of months should provide ample time to work through the final regulatory issues.
Phil Spencer, head at Xbox, also said that he’s optimistic about the deal and excited to bring more games to players everywhere now.
According to The Verge, Microsoft and Blizzard Activision agreed to a higher termination fee and new commercial arrangements for the transaction. The termination fee is now set at $3.5 billion if any of the parties walk away and the deal doesn’t get finalized by August 29th. It will jump to $4.5 billion, if the deal is not closed by September 15th.
Major Update: FTC withdraw its case against Microsoft and Activision Blizzard
FTC withdraw its case against Microsoft and Activision Blizzard, almost 2 weeks after it failed its case against the Redmond-based tech giant.
Microsoft and Blizzard Activision are now free to close the deal, before the deadline of October 18.
What do you think about the billion-dollar attempt from Microsoft over Activision Blizzard? Let us know in the comments!
