June 16, 2024

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The FTC argues why Microsoft’s deal to buy Activision should be blocked

The FTC argues why Microsoft’s deal to buy Activision should be blocked

The US Federal Trade Commission presented its case on Thursday over why it issued a preliminary injunction to temporarily block Microsoft’s acquisition of video game maker Activision Blizzard.

The FTC says a judge needs to stop Microsoft and Activision Blizzard from closing their $69 billion merger until the agency’s internal court decides whether the combination harms competition in the video game industry.

The companies announced the deal 17 months ago.

“If this transaction is completed, the combined company likely has … the ability and incentive to damage competition in various markets related to consoles, subscription services, and (for games) the cloud,” said James Weingarten, an FTC attorney. Government’s opening arguments.

Microsoft, US regulators are heading to court for more than $69 billion

Microsoft faced off against US regulators on Thursday in a bid to get permission to complete its $69 billion acquisition of video game maker Activision Blizzard. (Reuters/Dado Rovic/Illustration/Reuters Photo)

The kit will give Microsoft’s Xbox video game console exclusive access to Activision games, leaving Sony Group Corp.’s Nintendo and PlayStation consoles out in the cold, according to the Federal Trade Commission.

The Activision acquisition will give Microsoft ownership of popular video game titles such as Call of Duty, World of Warcraft and Candy Crush.

Microsoft attorney Beth Wilkinson responded in op-ed statements, “I think you’ll see that every piece of evidence shows that it only makes sense for Xbox to make these Activision games available to as many people as possible on as many platforms as possible.”

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She added that if a court order is issued, it could result in a three-year administrative action that would destroy the deal.

The Federal Trade Commission halts a $69 billion Microsoft transaction

Blizzard booth during a forum

Microsoft said the deal would benefit gamers and game companies, and offered to sign a legally binding approval decree with the Federal Trade Commission to make “Call of Duty” games available to competitors for ten years. (AP Photo/Jae C. Hong/AP Images)

A slew of experts and executives are scheduled to appear on Friday, including Microsoft Gaming CEO Phil Spencer, Microsoft’s chief financial officer Jamie Laufer, and former director of product management for Google’s shutdown Stadia cloud gaming service Dov Zimring. now. Sony Interactive Entertainment CEO Jim Ryan will appear by video.

The FTC argued that the deal, which would be the largest for Microsoft and the largest in the history of the video game industry, would give Microsoft “the ability and increased incentive to withhold or dilute Activision content in ways that significantly reduce competition”.

Microsoft, activity to appeal UK decision to block $69 billion deal

Xbox Phil Spencer

FTC lawyers will call on experts to show why Microsoft would get an unfair advantage if it were allowed to combine its Xbox franchise with the acquisition of Activision. (Reuters/Kevork Djansizian/Reuters Photo)

Microsoft said the deal would benefit gamers and game companies alike, and offered to sign a legally binding approval decree with the Federal Trade Commission to provide “Call of Duty” games to competitors for a decade.

The hearing is scheduled to last until June 29. Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick will be among the witnesses next week.

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A decision is not expected until after the Fourth of July holiday.

tape protection last changes changes %
MSFT MICROSOFT CORP. 339.71 +6.15 +1.84%
ATVI ACTIVISION BLIZZARD INC. 82.28 +1.34 +1.66%
Sony SONY GROUP COMPANY. 93.82 -0.85 -0.90%

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If the judge refuses to issue an injunction, Microsoft can move to close the deal before the July 18 deadline and avoid a $3 billion breakup fee.

Reuters contributed to this report.