The FTC’s pre-trial hearing with Microsoft has come and gone, and with it no immediate resolution is in sight.
Instead, the FTC’s legal counsel, James Weingarten, stated that neither side have yet to have any substantive discussion on the topic of Microsoft’s acquisition of Activision Blizzard King.
FTC have been investigating the deal alongside several antitrust and competition regulators in different countries across the board. While the European Commission and the UK Competition and Markets Authority each indicated they would be going forward with deeper investigations on the deal, FTC moved a few steps forward.
They revealed plans to sue Microsoft to block the deal from taking place completely. This comes even as the FTC itself faces critique for being hasty in filing such a case, when their arguments for blocking are built on anecdotal evidence and don’t hold up to legal scrutiny.
If the two sides don’t reach a settlement, it will still take all the way back to August 2023 before official hearings will start under Judge Michael Chappell. The European Commission will itself make a decision by the end of March.
This does give Microsoft ample time to convince FTC that they should be allowed to pursue the transaction. They have several ways to get this desired outcome.
There’s an expectation that Microsoft will offer compromises to the FTC, although it’s clear that Microsoft is also running down their other options before they take that direction.
Thus far, Microsoft has been leaning on the argument that the case the FTC has filed has no bearing. It’s certainly the case that the FTC has opened themselves up to scrutiny by going straight to court instead of engaging in negotiations with Microsoft first. As we had reported, if FTC loses or falters in this case in some way, it could have real ramifications for FTC head Lina Khan outside of video games, and in her political sphere.
If the EU and/or UK regulators approve the purchase, Microsoft may try to make the case to Judge Chappell to dismiss the lawsuit outright, as other agencies did not find such faults. The EU had already corrected FTC on their claims that the EU found fault and blocked Microsoft’s purchase of Zenimax Media, parent company of Bethesda Softworks and id Games.
Microsoft also has some surprising support for their acquisition. The UK CMA found out that 75 % of their survey respondents supported the transaction. The CMA also received a letter supporting Microsoft’s move, from a video game company they have chosen to keep anonymous. Lastly, no less than the American Federation of Labor and Congress of Industrial Organizations, no doubt smarting in their interactions with the current Activision leadership, have criticized the FTC for their suit, and told them that this acquisition will be good for Activision’s workers themselves.
Source: Video Games Chronicle