The Federal Trade Commission has officially paused its administrative trial regarding Microsoft’s impending acquisition of Activision Blizzard. This development, initially reported by Bloomberg, allows for negotiations between the agency and companies to reach a settlement for the staggering $68.7 billion merger.
The decision by the FTC to halt the case signifies a significant victory for Microsoft and Activision as they strive to finalize the deal. In December, the agency filed a lawsuit to block the merger, and an evidentiary hearing was scheduled for August 2nd. However, last week, their attempt to prevent the merger prior to the administrative trial was unsuccessful. The FTC has filed an appeal regarding their court loss.
“The FTC has not demonstrated a probable success in its claim that the combined company is likely to remove Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially reduce competition in the video game library subscription and cloud gaming markets,” stated Jacqueline Scott Corley in a ruling last week. Microsoft has since struck a deal with Sony, ensuring that Call of Duty will remain on PlayStation for the next 10 years if the merger is completed.
In a motion filed on Tuesday, Microsoft and Activision have requested the FTC to withdraw its case. According to FTC rules, the agency is required to drop the case after such a request is made, as they were denied a preliminary injunction to halt the merger. As reported by Bloomberg, Microsoft and Activision can now attempt to convince the FTC to accept remedies addressing the agency’s concerns about the impact on competition in the gaming industry. Alternatively, they may persuade the FTC to entirely abandon its opposition to the merger.
The FTC still has the option to proceed with its administrative trial after the merger is finalized. However, it is uncommon for the agency to pursue an in-house case following a loss in federal court.
The original deadline to complete the acquisition was Tuesday, but Microsoft and Activision have extended the merger agreement until October 18th to allow additional time to address remaining regulatory concerns. In the event the deal falls through, Microsoft is liable for a breakup fee of up to $4.5 billion, although both parties are determined to finalize the merger.
Microsoft and Activision still need approval from a UK regulator to proceed with the deal without resorting to alternative measures to continue their operations in the country. Initially, the Competition and Markets Authority blocked the merger in April, but recently, it has displayed a willingness to amicably address concerns regarding the potential impact on the cloud gaming market.
Microsoft is preparing an updated merger proposal for the CMA, and a decision is expected by August 29th, although it aims to reach a decision as soon as possible. During a recent hearing, a CMA lawyer expressed confidence that both the regulator and Microsoft will be able to resolve the concerns. This reinforces the likelihood that the largest merger in gaming history will conclude in the coming weeks.
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Deepak Sen is a tech enthusiast who covers the latest technological innovations, from AI to consumer gadgets. His articles provide readers with a glimpse into the ever-evolving world of technology.
