Yesterday, it was no coincidence that we wrote that we would be writing about the developments surrounding Microsoft and Activision Blizzard over the weekend.
The FTC, the US Federal Trade Commission, has failed to obtain a temporary restraining order that would have prevented Microsoft from closing its $68.7 billion deal to own Activision Blizzard King. The FTC filed an appeal of that, but in the meantime, it filed an emergency motion with the Ninth Circuit Court of Appeals to block the deal before the deadline. But Judge Jacqueline Scott Corley has previously denied such a motion, so it’s no surprise that the FTC’s motion has been struck down again.
The FTC claims that the judge applied the standard for a full trial to a preliminary injunction request and erred in finding an incentive to foreclose but considering that consumer benefits outweigh that. She shouldn’t have relied on the remedies offered by Microsoft (such as the 10-year deals to bring Call of Duty/Activision Blizzard games to other platforms) and erred again when she didn’t consider the effects of a partial foreclosure, ignoring foreclosure incentives for which the FTC reckons there is evidence.
Microsoft’s and Activision Blizzard’s lawyers’ opinion is the opposite: “The FTC’s filing fails to provide any basis to expect that it will prevail on a single issue on appeal, much less run the table on the multiple findings it would have to reverse to prevail. Specifically, as we will explain to the Ninth Circuit, the FTC does not identify a single legal error in this Court’s reasoning, nor any reason to think that any of the complaints they lodge would have changed the outcome.”
According to Microsoft, the FTC made up its emergency. Since the court denied the request, they may feel the same way, so the FTC essentially has no significant obstacle to closing the deal in the US before the July 18 deadline (after which the Redmond-based company would have to pay Bobby Kotick and his team $3 billion as a breakup fee, and then start negotiations again, but that would mostly be a formality because both sides want the deal).
Bloomberg, citing unnamed sources, reported on what steps Microsoft would take to get the UK’s Competition and Markets Authority, the CMA, to give its nod to the acquisition. The cloud rights in the country could be sold to a third-party company (which is why the CMA blocked the acquisition) so that an internet, games, telecoms, or private company could own the rights. The CMA’s investigation will end by August 29 but will end as soon as possible.
Meanwhile, Turkey has already approved the deal, making it the 40th country in line…
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