Microsoft-Activision Faces Obstacles in Bid to Acquire Call of Duty Maker

Introduction: The Federal Trade Commission's Appeal Casts Doubt on Microsoft's $69bn Purchase of Activision Blizzard

In a setback for Microsoft, the Federal Trade Commission (FTC) has taken steps to challenge the approval of the tech giant's acquisition of games publisher Activision Blizzard, valued at $69 billion (£53 billion).

Despite the FTC's initial attempt to block the merger being rejected by a district judge in San Francisco earlier this week, the regulatory body has decided to appeal the ruling. The proposed deal between Microsoft and the renowned Call of Duty maker would mark the largest acquisition in the history of the gaming industry.

Undeterred by the FTC's move, Microsoft's President Brad Smith expressed disappointment in the regulator's persistent pursuit of what he referred to as a "demonstrably weak case." Microsoft remains committed to opposing any further delays to the merger process.

Reasons for the FTC's Opposition: Concerns Over Gaming Competition and Consumer Impact

The FTC argues that Microsoft's acquisition of Activision Blizzard could detrimentally affect gamers and reduce competition by granting the Xbox maker the ability to restrict rivals' access to Activision's games.

In its bid to prevent the takeover, the FTC sought an emergency ruling, which was ultimately denied by US District Judge Jacqueline Scott Corley. Judge Corley stated that the regulator had not provided sufficient evidence to prove that Microsoft would likely withdraw Call of Duty from Sony PlayStation or significantly hamper competition in the video game library subscription and cloud gaming markets.

Positive Signals from the UK's Competition and Markets Authority (CMA)

While the FTC poses a challenge, the Competition and Markets Authority (CMA) in the UK appears to have softened its opposition to the merger. Initially, the CMA had blocked Microsoft's proposed takeover, expressing concerns about reduced innovation and limited options for gamers.

However, the CMA recently announced its willingness to entertain alternative proposals from Microsoft to restructure the transaction. Recognizing that Microsoft and Activision are exploring possibilities for modifying the deal, the CMA is open to engaging in discussions based on these potential adjustments.

Global Perspectives on the Microsoft-Activision Deal

The response to the Microsoft Activision deal has been divided among regulators worldwide. European Union (EU) authorities have granted their approval after Microsoft addressed their competition-related concerns.

Conclusion: Uncertain Future for the Microsoft-Activision Merger

While the appeal by the Federal Trade Commission presents a hurdle for Microsoft's ambitious acquisition, the initial ruling in favor of the deal indicates a likelihood of the merger proceeding. Additionally, the UK's Competition and Markets Authority's willingness to consider revised proposals from Microsoft suggests a potential path forward for the transaction. Ultimately, the final outcome of the Microsoft-Activision merger remains uncertain as global watchdogs continue to monitor the situation closely.