…By Henry George for TDPel Media.
The US’s consumer protection watchdog is challenging a decision that approved Microsoft’s acquisition of video game maker Activision Blizzard.
The $69 billion deal has faced scrutiny from regulators in both the US and the UK due to concerns about Microsoft gaining an unfair market advantage and its impact on gamers. This acquisition would be one of the largest ever in the technology industry.
Judge Rejects FTC’s Request to Block Acquisition
US district judge Jacqueline Scott Corley recently dismissed the Federal Trade Commission’s (FTC) request to block the high-profile acquisition, granting permission for it to proceed.
The judge stated that the FTC had not demonstrated a strong likelihood of winning the case if taken to trial.
Microsoft expressed disappointment with the FTC’s pursuit of what it sees as a weak case and vowed to oppose any further attempts to delay the acquisition.
FTC Files Appeal Against Judge Corley’s Ruling
The FTC has now filed an appeal against Judge Corley’s decision.
The specific arguments for the appeal will be presented at a later date.
Microsoft’s president, Brad Smith, expressed a desire to avoid further delays to the acquisition, emphasizing that the court ruling supported the notion that the merger is beneficial for competition and consumers.
Activision Blizzard Confident in Merger’s Outcome
Activision Blizzard’s chief communications officer, Lulu Cheng Meservey, tweeted that the company remains confident in the merger’s outcome.
She stated that the facts surrounding the case have not changed and expressed anticipation for the opportunity to present their case in court once again.
Merger Criticized for Stifling Competition in Cloud Gaming Market
Regulators have criticized the merger on the grounds that it could stifle competition in the rapidly growing cloud gaming market, where games are played using remote servers without the need for downloads.
The UK’s Competition and Markets Authority (CMA) argued that Microsoft, as the owner of Xbox, already dominates between 60% and 70% of cloud gaming services.
The merger could further solidify Microsoft’s advantage and undermine emerging competitors.
CMA Open to Discussions on Modifying the Deal
Despite their initial opposition to the acquisition, the CMA has now expressed willingness to engage with Microsoft to explore potential modifications to the deal.
Consequently, the upcoming legal battle scheduled in the UK has been put on hold.