Revamped Article:
Microsoft's Acquisition of Activision Blizzard under Review
US Regulators Push Back on Microsoft-Activision Deal
The Federal Trade Commission (FTC) urged the US Court of Appeals to reject Microsoft's acquisition of Activision Blizzard, arguing that the lower court judgment on "Call of Duty" was too lenient. This move aims to impede the merger's finalization in 2023.
The FTC suggests that Judge Jacqueline Scott Corley went excessively accommodating in her July verdict, given Microsoft had signed a "Call of Duty" deal with Nintendo, Nvidia, and other gaming studios. This agreement, according to the FTC, overlooked potential antitrust issues related to this blockbuster merger.
The FTC's arguments to the three-judge panel of the US Court of Appeals for the Ninth Circuit echoed their last attempt to block the merger – supported by the EU and the UK, which concluded in October after Microsoft presented several offers and arrangements to address competition and gamer harm concerns.
The $69 billion acquisition is one of the largest technology acquisitions in history, focusing on evaluating its impact on emerging technologies for game access, predominantly the growing cloud streaming market, allowing gamers to play games instantly on their devices without downloading.
Call of Duty Dispute
Regulatory agencies argue that Microsoft, with controlling stakes in well-known Activision titles like "Call of Duty" and "World of Warcraft," would transform into a dominant video game publisher. Consequently, they argue it would restrict rival console manufacturers or cloud streaming media platforms from offering these games.
The FTC attempted to obstruct the merger twice, first before their internal administrative court and subsequently before the US District Court, although they suffered a series of setbacks leading some to rethink the commission's role in this case.
Microsoft countered by offering competing gaming platforms long-term contracts and pledged to continue making "Call of Duty" available to them post-merger. By sealing these agreements, "Call of Duty" debuted on cloud streaming services like Nvidia for the first time. Later, Microsoft restructured the deal during negotiations with UK antitrust authorities and separated the cloud gaming rights from Activision Blizzard, assigning them to Ubisoft, another major gaming publishing firm.
Monopoly Concerns
The FTC contends that while deals may benefit certain players, Microsoft would still maintain a monopoly on Activision content in various niches, such as the video game subscription services market.
"I don't see how it could foster competition to give someone a monopoly on something," stated FTC attorney Imad Dean Abyad during the Wednesday court hearing. "It might be good for certain consumer groups, but that's a different story."
In response to regulatory skepticism, Microsoft presented rival gaming platforms with long-term deals and assured "Call of Duty" would be accessible post-merger. With these agreements, "Call of Duty" became accessible on cloud streaming services like Nvidia for the first time. Microsoft later restructured the deal during UK antitrust authority negotiations, separating the cloud gaming rights from Activision Blizzard and assigning them to Ubisoft.
Enrichment Data Integration:
- The FTC opposed Microsoft's acquisition of Activision Blizzard, citing concerns about competition and potential influence on the video game industry. Although initially obstructed, the merger went ahead in October 2023, with Microsoft addressing competition and gamer harm concerns in several agreements.
- Critics argued that Microsoft, through acquiring Activision Blizzard and popular titles like "Call of Duty" and "World of Warcraft," would gain too much control over certain parts of the gaming industry, potentially limiting competitors on gaming consoles or cloud streaming platforms.
[1] Enrichment Data sourced from various reliable publications and regulatory reports, which provides additional insights and timelines for further contextual understanding and evaluation of the events leading up to the merger and subsequent legal challenges.
