A US judge temporarily halts “Microsoft-Activision’s $69 billion deal.”
A judge has approved a request by US regulators to temporarily halt Microsoft’s $69 billion acquisition of “Activision Blizzard.” The court argues that the temporary restraining order is necessary to maintain the current state of affairs while the complaint is being addressed.
The US “Federal Trade Commission (FTC)” expresses concerns that the deal could substantially diminish competition within the industry. A two-day hearing is scheduled to begin on June 22nd in San Francisco. If successful, the acquisition would be the largest in the history of the video game sector.
Opinions regarding the deal are divided among competition regulators in Europe, the UK, and the US. The UK has blocked the buyout, while the “European Union” has granted approval. To proceed with the acquisition, Microsoft and Activision must obtain regulatory approval from the US, UK, and EU.
Microsoft and Activision have until June 16th to present legal arguments opposing the preliminary injunction, with the FTC required to respond by June 20th. Microsoft argues that acquiring Activision would benefit gaming companies and players.
“The European Commission” has approved the acquisition, stating that Microsoft’s offer of ten-year free licencing agreements would ensure fair competition in the market, providing European consumers and cloud game streaming services access to Activision’s PC and console games. However, the UK’s “Competition and Markets Authority (CMA)” blocked the deal in April due to concerns over reduced innovation and limited options for gamers. Microsoft and Activision criticised the CMA’s decision and plan to appeal.
Brad Smith, Microsoft’s president, referred to the CMA’s ruling as the company’s “darkest day” in its four decades of operating in Britain. The acquisition of Activision, known for games like Candy Crush, is viewed as crucial for Microsoft’s effort to catch up with its primary competitor, Sony.
This potential investment by Microsoft can be seen as a strategic move for the future of video games, as the company places a significant bet on its “Xbox Game Pass service,” often likened to the “Netflix of games.” Microsoft envisions a future where players subscribe to game libraries and stream content through cloud gaming rather than relying on individual purchases, which is the prevailing model at present.
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