Microsoft Faces New FTC Suit to Block Activision Blizzard Deal
The FTC just filed a new lawsuit to seek to stop Microsoft's purchase of Activision Blizzard.
Terms of the Microsoft-Activision tie-up call for the deal to be closed by July 18, the AP reports.
Microsoft has been trying to win the OK from global regulators for the nearly $70 billion purchase.
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Microsoft's nearly $70 billion deal to buy video game company Activision Blizzard could be stopped in its tracks after a US federal regulator sued Monday to stop the tie-up.
A contract between Microsoft and Activision requires the deal to close by July 18, but the latest action by the Federal Trade Commission seeks to stop Microsoft's purchase of the company that's behind hit franchises like Call of Duty and World of Warcraft.
The FTC already took Microsoft to court to block the merger, but that matter was to be heard by the US agency's in-house judge in a trial set to start on Aug. 2. That administrative process doesn't actually preclude the parties from closing the deal. This suit, filed in federal court in San Francisco, seeks to stop the deal from closing.
For its part, Microsoft — maker of the Xbox game system — has been struggling to win worldwide approval for the deal with just over a month before the deadline to close it.
"We welcome the opportunity to present our case in federal court," Brad Smith, Microsoft's vice chair and president, said in a statement Monday. "We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market."
The all-cash deal announced in January 2022 has been scrutinized by regulators around the world over fears that it would give Microsoft and its Xbox console control of Activision's hit franchises and give it an unfair boost in the emerging business of cloud-based game subscriptions. It could be the priciest tech industry merger in history.
Fierce opposition has been driven by rival Sony, which makes the PlayStation gaming system.
Microsoft sought to counter the resistance by striking a deal with Nintendo to license Activision titles like Call of Duty for 10 years and offering the same to Sony if the deal went ahead.
European regulators representing the 27-nation bloc approved the deal last month on condition that Microsoft make some promises meant to boost competition in the cloud-based gaming market. A number of other countries, including China, Japan, Brazil and South Korea, have also approved it.
But the blockbuster deal has remained in jeopardy because of the surprise April decision by the UK's Competition and Markets Authorityy and the ongoing case in the US.
Microsoft in late May filed an appeal of the British regulator's decision and has also voiced strong public opposition directed at top government officials.
US-based consumer advocacy group Public Citizen, an opponent of the deal, welcomed the FTC's move Monday.
"Although the agency has already used its authority to block the merger through administrative proceedings, Microsoft is pushing to culminate the purchase of Activision before the agency can finish its process," said a statement from Public Citizen's competition policy advocate Matt Kent. "By filing in federal court to enjoin the transaction, the FTC is showing that it won't back down in the face of Microsoft's escalatory tactics."
Source: Business Insider
