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US Federal Trade Commission to block Microsoft’s Acquisition of Activision Blizzard
The US Federal Trade Commission is set to file an injunction seeking to block Microsoft’s $69 billion deal to acquire Activision Blizzard. A source familiar with the matter has confirmed that the FTC will urge the court to block the transaction on antitrust grounds. This comes after British competition authorities blocked the takeover in April, and the EU approved the deal in May.
Antitrust concerns over Xbox Access to Activision Games
Microsoft’s proposed acquisition of Activision Blizzard has raised concerns regarding the exclusivity of the Call of Duty franchise content on Xbox consoles. The FTC argues that providing the exclusive access would leave Nintendo consoles and Sony Group’s PlayStation out in the cold. In response, Microsoft has offered to provide Call of Duty games to rivals, including Sony, under a legally binding consent decree for a decade.
Legal Hurdles for FTC in Blocking the Deal
Experts have noted that the FTC faces an uphill battle to convince the judge overseeing the case in the Northern District of California to block the deal. Microsoft has made voluntary concessions to allay fears that it could dominate the gaming market.
Microsoft’s Response to FTC’s planned Injunction Filing
In a statement released on Monday, Microsoft President Brad Smith stated that the company welcomes the opportunity to present its case in federal court. He also added that Microsoft is confident in its agreement with Activision Blizzard and its beneficial impact on the gaming industry as a whole.
Conclusion
The FTC’s planned injunction to block Microsoft’s acquisition of Activision Blizzard highlights the antitrust issues that arise from tech companies’ massive expansion plans. However, legal experts believe that Microsoft’s concessions could make it challenging for the FTC to win the court’s approval. Nevertheless, we can expect more developments in the coming days as both parties present their cases in court.
FAQ
What is Activision Blizzard?
Activision Blizzard is a video game holding company that owns popular franchises such as Call of Duty, World of Warcraft, and Diablo.
Why did the British competition authorities block the takeover?
The British competition authorities blocked the takeover due to concerns over potentially reducing competition in the video game industry.
What is the FTC’s concern with Microsoft’s acquisition of Activision Blizzard?
The FTC is concerned that Microsoft’s acquisition of Activision may lead to exclusive access to popular video game franchises, including Call of Duty, leaving users of other consoles such as Sony’s Playstation and Nintendo’s Switch without access.
How has Microsoft responded to the FTC’s planned injunction?
Microsoft has stated that it welcomes the opportunity to present its case in court and that the company is confident in the agreement with Activision Blizzard and its beneficial impact on the gaming industry as a whole.
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