The US Federal Trade Commission (FTC) said today that it will appeal a ruling by the Northern District Court of California to continue to block Microsoft’s $68.7 billion acquisition of game publisher Activision Blizzard.
Yesterday, Judge Jacqueline Scott Corley of the U.S. District Court for the Northern District of California ruled against the FTC’s request for a preliminary injunction against the transaction, allowing Microsoft to proceed with the acquisition.
For the ruling, the FTC said today it would appeal.
In this regardBobby Kotick, Activision Blizzard CEO Bobby Kotick said: “If the FTC is wasting taxpayer resources on something like this, I will be surprised.” Kotick believes that the appeals court will not approve suspend execution of the transaction.
“The success of the appeal depends largely on the analysis of the ‘factual record,'” said Daniel Crane, an antitrust scholar at the University of Michigan Law School. Crane believes that there is no commitment with Microsoft yet. Contradictory factual records. Microsoft has previously promised that it will not limit the game Call of Duty to its own Xbox platform. “The FTC may have difficulty establishing that fact on appeal,” Klein said.
Faced with antitrust investigations around the world
Last January, Microsoft announced the acquisition of Activision Blizzard for approximately $69 billion. After the transaction is completed, Microsoft will become the world’s third-highest-revenue game company, second only to Tencent and Sony. Several regulators around the world have since launched investigations into the deal.
Earlier this month, the FTC filed an application in court seeking a temporary injunction from a judge to block the deal. The FTC believes the deal will harm competition in the gaming market.
So far, the deal has been approved by Saudi Arabia, Brazil, Serbia, Chile, Japan, South Africa and the European Union, and is pending approval from the United States and the United Kingdom.
Yesterday, after Judge Corley approved Microsoft to continue to advance the deal, the British antitrust regulator “Competition and Markets Authority” (CMA) quickly stated that it was ready to re-evaluate any proposal from Microsoft. As Blizzard and the British CMA have asked the court to suspend the proceedings.
The attitude of the British CMA has changed sharply
Britain’s CMA said today that a restructuring deal between Microsoft and Activision Blizzard could allay its concerns, marking a back down from opposition to the biggest gaming deal in history.
It’s no secret that the UK CMA is a strong opponent of Microsoft’s Activision-Blizzard deal. An antitrust investigation into this transaction was launched very early. At the end of April this year, the CMA officially blocked the transaction, mainly concerned that it would have an adverse impact on future competition in the cloud gaming market. Subsequently, Microsoft hired high-profile lawyers to try to overturn the ruling.
Affected by the ruling of US judge Corley, the British CMA said today that Microsoft and Activision Blizzard can choose to restructure the deal, and then the CMA will launch a new investigation. CMA said: “Microsoft and Activision Blizzard have indicated that they are considering how to modify this deal, and we are also preparing to engage with them on this basis.” Will be determined in due course.
Do not want to break away from European and American jurisdictions
With the FTC’s appeal looming, the U.K. CMA’s decision to agree to reconsider the deal at this stage surprised advisers to the deal and many antitrust lawyers.
“It’s really an unprecedented and dramatic shift,” said Alex Haffner, a partner at British law firm Fladgate.
A person familiar with the matter, who asked not to be named, said they were surprised by the CMA’s decision, saying the U.K. regulator did not appear to want to break away from the twin jurisdictions of the European Union and the United States. The European Union had already approved the deal in May this year.
According to the plan, the deadline for Microsoft and Activision Blizzard to complete the deal is July 18. If the deal is ultimately blocked, Microsoft would need to pay a $3 billion breakup fee. Microsoft also acknowledged in court documents that if it loses the FTC lawsuit, the deal is likely to fall through.
