FTC's Bid to Halt Microsoft's $68.7 Billion Acquisition of Activision Blizzard

The Federal Trade Commission (FTC) has unleashed a flurry of legal maneuvers to block Microsoft's ambitious acquisition of gaming powerhouse Activision Blizzard. With the July 18 deadline looming, the FTC has filed for a temporary restraining order and preliminary injunction, desperately seeking to put a halt to the deal. The article delves deeper into the battle surrounding Microsoft's acquisition of Activision Blizzard, capturing the tension, fears, and legal intricacies that envelop this high-stakes struggle for gaming dominance.

FTC's Concerns and Potential Impact

The FTC's fears are anything but trivial. The commission is deeply concerned that Microsoft's acquisition of Activision Blizzard would unleash an uncontrollable gaming behemoth with the power to "withhold or degrade" Activision's precious gaming products. They fear that Microsoft could wield its newfound dominance to manipulate game pricing, diminish the quality of gameplay experiences on rival platforms, or, worst of all, prevent popular titles from gracing the screens of consoles not bearing the Xbox emblem. 

"Call of Duty" and Beyond: Concerns Raised

One game stands out amidst the sea of concerns: the iconic "Call of Duty" franchise. Though currently available across platforms, regulators worry that Microsoft might exert its influence to hold future installments hostage, luring gamers exclusively to the Xbox realm and snatching away potential buyers from rivals like Sony and other console makers. The battle for dominance intensifies as the FTC envisions a landscape where beloved titles become pawns in a high-stakes game of control.

With the clock ticking, the FTC's desperate plea for a preliminary injunction hangs in the balance. The looming deadlines for the administrative proceeding, the Competition and Markets Authority appeal in the U.K., and the July 18 cutoff for the merger pose a daunting challenge. The FTC argues that if the merger were to proceed before the case reaches its conclusion, restoring the status quo would be a Herculean task, if not downright impossible.

Backstory: Microsoft's Unprecedented Pursuit

Microsoft set its sights on acquiring Activision Blizzard in a deal worth a staggering $68.7 billion, marking a historic pinnacle in its acquisition endeavors. Originally projected to be finalized by the end of June 2023, the fate of this colossal transaction now hangs precariously in the balance. Should the deal collapse, Microsoft may find itself burdened with a termination fee of up to $3 billion, a bitter pill to swallow in the face of thwarted aspirations.

The FTC's lawsuit, filed in December 2022, thrusts the acquisition into a labyrinthine legal battle. The commission chose an unconventional route, opting to bring the case before its internal administrative law judge, setting the stage for a highly anticipated hearing slated to commence on August 2. A decision made by the judge can be challenged and appealed to the full commission, creating a cascading cascade of legal complexity. Microsoft's President, Brad Smith, eagerly anticipates the opportunity to present their case in federal court, expressing hope for a more competitive market as a result.

Not to be outdone, Activision Blizzard's CEO, Bobby Kotick, rallies his troops, embracing the FTC's decision to bring the transaction into the federal court arena. After a meticulous year of preparation, Kotick's legal squadron stands ready to lay their case before a federal judge. Their determination and unwavering conviction reverberate throughout the gaming world, as they seek to sway the judge with the merits of their planned transaction.

While the European Commission initially voiced concerns over reduced competition, they eventually cleared the acquisition. In stark contrast, the U.K.'s Competition and Markets Authority delivered a decisive blow, blocking the deal and propelling it into a fierce appeal process. As the drama unfolds, Microsoft attempts to win Sony's favor by offering a decade-long agreement, guaranteeing simultaneous releases of "Call of Duty" games on both Xbox and PlayStation consoles. However, Sony remains defiant, stating their primary objective is to block the merger rather than striking a new deal.