FTC Explains Why It Joined Sony in Opposing Microsoft's Activision Blizzard Acquisition

The FTC clarified its decision to side with Sony against Microsoft’s acquisition of Activision Blizzard. In December 2022, the U.S. Federal Trade Commission filed a lawsuit on antitrust grounds to block Microsoft’s acquisition of Activision Blizzard.

Microsoft’s pending takeover bid for Activision Blizzard (which also includes Candy Crush maker King) is the largest such public takeover attempt in the history of the gaming industry. The proposed deal is worth nearly $69 billion, dwarfing Take-Two’s record takeover of Zynga, which would have cost the publisher $12.7 billion in 2022. The U.S. Federal Trade Commission has mounted the biggest legal challenge to the deal to date, but the U.S. legislature has not uniformly backed the executive’s suit.

This government divide was recently highlighted at the FTC’s fiscal year 2024 budget hearing on April 18, when Republican Representative Diana Harshbarger took the opportunity to ask why the regulator was “on Sony’s side” against Microsoft Acquisition of Activision Blizzard. FTC Chair Lina Khan responded that the agency always finds feedback from all market participants to be very helpful, thus dismissing allegations that the lawsuit was motivated by a desire to help Sony. Commenting that the antitrust complaint against Microsoft “speaks for itself,” Khan insisted that the FTC’s attempt to block the deal was based on an independent assessment “based on law and fact.”

The fact that Republican politicians are questioning the decisions of Democratic-appointed regulators isn’t particularly surprising, but Rep. Harshbarger’s view that Sony doesn’t need protection seems to have some bipartisan momentum. Democratic Senator Maria Cantwell criticized Sony’s monopoly practices in March 2023, arguing that the company’s anti-competitive behavior was holding back Microsoft’s growth in Japan. Republican Senator Kevin Cramer outlined similar sentiments in an April 2023 letter to Sony, in which he also argued that the Japanese gaming giant’s control of the console market was hurting his home state of North Dakota. economic development prospects.

Despite the FTC’s opposition to a blockbuster acquisition, some independent analysts believe Microsoft is likely to complete its acquisition of Activision Blizzard in the near future. Viewed in this light, the agency’s antitrust lawsuit is an aggressive attempt to win meaningful concessions from Microsoft, which Microsoft would rather settle than engage in a years-long legal battle with the FTC, even if it ends up might win.

That view is far from controversial, seeing how Microsoft itself has repeatedly told investors it expects the deal to close by mid-2023. That time frame does not allow the FTC to exhaust all legal options to oppose the merger — that is, to appeal — suggesting that Microsoft is pushing for a settlement. So far, the acquisition of Activision Blizzard has been approved successively in Saudi Arabia, Brazil, Serbia, Chile, Japan and South Africa.

Source : Kevin Cramer (PDF), Statista

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