Based on the most recent reports, the Federal Trade Commission (FTC) in the United States has submitted a request to put a stop to Microsoft's $69 billion purchase of Activision Blizzard, the renowned creator of "Call of Duty." Nevertheless, a federal judge recently rejected this request, which is quite a surprising development.
On Tuesday, during the legal proceedings, the San Francisco federal court rendered a decision in favor of Microsoft, asserting that the Federal Trade Commission (FTC) had not adequately substantiated their claim of antitrust law violation regarding the acquisition. Subsequently, following the FTC's defeat in the courtroom on Wednesday evening, they promptly lodged an appeal. Nonetheless, their appeal was denied by the federal judge on Thursday evening, signifying a setback for the FTC.
The Federal Trade Commission (FTC) has outlined its strategy to pursue an urgent course of action by submitting an emergency motion to the Ninth Circuit Court of Appeals. Their intention is to obtain a temporary halt to Microsoft's acquisition of Activision. This move aims to allow for further examination and resolution of lingering regulatory issues that remain unresolved. It is noteworthy that, unless an agreement is reached between the parties involved, the aforementioned deal is set to expire on July 18. Additionally, it is important to acknowledge that either party will retain the right to withdraw from the transaction beyond this date.
Microsoft, a globally renowned technology giant, expressed profound disappointment and dissatisfaction in response to the Federal Trade Commission's (FTC) request. In a resolute manner, Microsoft vowed to vigorously defend its position and take decisive action to counter any perceived infringement on its proposed acquisition. On the other side of the spectrum, the FTC, being a regulatory authority entrusted with maintaining fair competition, argued with conviction that the presiding judge committed an egregious error in denying their plea for suspending the agreement. Asserting their unwavering stance, the FTC declared its intention to actively pursue obtaining a temporary injunction, leveraging the legal framework at their disposal, in order to effectively disrupt and postpone the finalization of the transaction until all concerns are adequately addressed and resolved to their satisfaction.
In a noteworthy turn of events, Microsoft took a proactive approach to address concerns related to potential anticompetitive practices. They reached an agreement with industry rival Nintendo, signing a comprehensive 10-year licensing agreement that will allow competitors access to popular games such as "Call of Duty." However, despite Microsoft's willingness to foster fair competition and collaborate with other players in the market, the presiding judge deemed the Federal Trade Commission's (FTC) request for a halt to the acquisition inappropriate. This decision indicates the judge's perspective on the matter and potentially highlights a difference in opinion between the FTC and the court regarding the necessity of a suspension in light of the licensing agreement.
Undoubtedly, this deal is being hailed as one of the most monumental in the annals of the gaming industry due to its sheer magnitude and far-reaching implications. However, the Competition and Markets Authority (CMA) in the United Kingdom has not shied away from asserting its stance on the matter. Despite the ruling in California that the deal has the potential to address concerns raised by regulatory authorities, the CMA has deemed it necessary to initiate a new investigation. This decision underscores the CMA's commitment to thoroughly scrutinize the implications of the transaction within the context of the UK market, emphasizing their dedication to upholding fair competition and protecting consumer interests.
Indeed, for the Federal Trade Commission (FTC), resorting to filing an appeal and entering the appellate court is considered a relatively uncommon course of action. However, it is worth noting that this is not the first time the FTC has taken such measures. Over a decade ago, the FTC appealed a case involving Whole Foods' acquisition of Wild Oats. These appeals ultimately led to a settlement being reached between the FTC and the companies involved, highlighting the FTC's commitment to ensuring fair competition and addressing potential antitrust concerns through various legal avenues when necessary.