Microsoft’s Acquisition of Activision Deal Can Go Forward, Says U.S. Judge

Spread the love

WASHINGTON: A U.S. judge on Tuesday ruled that Xbox maker Microsoft could go ahead with its proposed $69 billion acquisition of video game maker Activision Blizzard, hurting consumers. It was a blow to President Joe Biden’s efforts to block corporate mergers, which he claims will give the .

Shortly after the judge’s ruling, the UK Competition and Markets Authority (CMA), which opposed the deal in April, said it was open to considering Microsoft’s proposal to resolve antitrust concerns in the UK. Stated.

The deal is the largest for Microsoft and the largest in the history of the video game business. Activision shares rose 11.3% to $92.01 on Tuesday afternoon, while Microsoft shares were flat.

The U.S. Federal Trade Commission has asked San Francisco U.S. District Judge Jacqueline Scott Corey to drop the proposed deal, saying it will give Microsoft exclusive access to Activision games, including best-selling “Call of Duty.” I was looking for The agency’s concern was that the deal could prevent these video games from being available on other platforms.

In her opinion, Ms. Cory disagreed.

“The FTC believes that the combined company will likely pull Call of Duty from Sony PlayStation, or that Activision’s content ownership will significantly increase competition in the video game library subscription market and the cloud gaming market. does not indicate that the claim that it would reduce to 200% is likely to succeed,” she wrote.

Corey’s decision marks another setback in the Biden administration’s efforts to strengthen antitrust enforcement.

A US court in San Francisco ordered the FTC to appeal the judge’s decision until Friday.

FTC spokesman Douglas Farrar said the antitrust regulator “considered that the merger poses a clear threat to free competition in cloud gaming, subscription services and consoles. I am disappointed,” he said. In the coming days, we will be announcing next steps to continue the fight to maintain competition and protect consumers. ”

Microsoft President Brad Smith said on Tuesday that he was “grateful” for the company’s “quick and thorough” decision. He also tweeted that he would be focusing on the UK going forward. He said, “While we ultimately disagree with the CMA’s concerns, we are considering how the deal could be amended to address the concerns in a manner acceptable to the CMA.”

RBC Capital Markets analyst Rishi Jaluria said the deal would make Microsoft the world’s third-largest gaming company, adding: “The market clearly didn’t expect that, so Activision stock is now priced at $100,000. That’s why it’s up 11%.”

At issue in the deal between Microsoft and Activision is its leadership in the gaming market, where sales are expected to grow 36% to $321 billion over the next four years, according to PwC estimates. While much of the testimony at the recent trial focused on ‘Call of Duty’, Activision also has other bestsellers such as ‘World of Warcraft’, ‘Diablo’ and mobile his game ‘Candy Crush Saga’. are producing.

The FTC argued that Microsoft’s use of Activision’s games could put rival console makers such as Nintendo and market leader Sony Group in a bind.

The FTC complaint raised concerns about the loss of competition not only in console gaming, but also in subscriptions and cloud gaming.

To address the agency’s concerns, Microsoft has agreed to license “Call of Duty” to rival companies, including a 10-year deal with Nintendo, contingent on completing the merger. During a five-day trial in June, Microsoft CEO Satya Nadella argued that the company had no incentive to shut out Sony’s PlayStation and other rivals to sell more of Microsoft’s Xbox consoles. .

#Microsofts #Acquisition #Activision #Deal #U.S #Judge

Spread the love

Leave a Comment