FTC files to block Microsoft from closing Activision deal
THE Federal Trade Commission (FTC) sued Microsoft in federal court on Monday (Jun 12) to block the company from closing its US$69 billion acquisition of Activision Blizzard.
In a filing in California federal court, the FTC sought a court order blocking the transaction from going through before the deal’s Jul 18 deadline, asking for the agency’s in-house court to have a chance to review.
Microsoft shares closed 1.6 per cent higher at US$331.85 while Activision Blizzard ended 0.8 per cent lower at US$79.77.
“We welcome the opportunity to present our case in federal court,” Microsoft president Brad Smith said in a statement. “We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market.”
The US$69 billion deal has faced tough antitrust scrutiny on both sides of the Atlantic. Microsoft, which makes the Xbox console, won approval in the European Union, but the UK’s Competition and Markets Authority (CMA) in April ruled against the takeover, saying Activision titles like Call of Duty would bolster Microsoft’s edge over rivals in the small but growing cloud-gaming market.
Microsoft is appealing the CMA decision, which is globally binding.
Microsoft’s Smith met with UK Chancellor Jeremy Hunt this month to discuss the deal. When the CMA vetoed the deal in April, Smith said he was “very disappointed” with the decision, which he said had shaken “people’s confidence in technology in the UK”.
The FTC first sued to block the deal in December in its in-house court, arguing the acquisition would harm competition in the US video game market. That FTC complaint doesn’t prevent Microsoft from closing the deal, leading to the FTC’s move to ask a federal judge to block the transaction.
The agency’s trial is set to begin Aug 2 but isn’t likely to produce a decision till the end of the year. BLOOMBERG
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