The FTC Sued Microsoft Reportedly To Preempt EU Settlement Over Activision Merger
Microsoft may have announced that it was acquiring Activision Blizzard for a staggering $68.7 billion in cash around this time last year, but the sheer magnitude of the proposed deal prompted regulators to investigate in case it would hamper the game industry's competitiveness. One regular that has taken a keen interest is the Federal Trade Commission.
While the FTC is the US regulator, which is the domestic turf of both corporations, Microsoft and Activision Blizzard are international concerns and require approval in the many markets in which they operate, and the deal also faced a stumbling block from the EU. But, according to a report, the EU was on the verge of settling over the proposed merger but the FTC filed a lawsuit to block the deal in an effort to dissuade their EU counterparts (via VGC).
Bloomberg reports from sources close to the investigations that the FTC sued in rapid time in order to get ahead of the EU regulators who were preparing to negotiate an agreement with Microsoft. The business outlet reported that the FTC filed its complaint only hours after its officials held a call with their EU counterparts, during which the EU had communicated that they were planning to commence talks with Microsoft over a settlement.
This then led to the FTC filing the lawsuit the same day to preempt the EU's potential compromise with Microsoft. according to the report. Sources told Bloomberg that the FTC had moved quicker than expected as it is more usual for the regulator to make decisions closer to the deadline of an investigation. An antitrust lawyer told Bloomberg that the FTC's rapid response was likely a way to "get out in front of the Europeans in an effort to shape the narrative", said Barry Nigro of Fried Frank Harris Shriver & Jacboson LLP.
The FTC are concerned over the proposed merger as the regulator believes it could give Microsoft undue advantages in console gaming as well as subscription games services and cloud gaming. The UK market watchdog shares similar concerns. Going into spring of this year, it is expected that we will learn the outcomes of these respective regulators' findings as they carry out their investigations.
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