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Just when Microsoft's buyout of Activision seemed to finally be near complete, the Federal Trade Commission said it will revive its attempt to block the $69 billion deal in an adjudicative process. The FTC plans to restart its in-house trial against Microsoft’s multibillion-dollar acquisition of the Call of Duty maker.
This effort by the FTC is unlikely to be anything more than a nuisance for Microsoft. It already received EU approval over the summer when the European Commission endorsed the deal as long as the tech giant could ensure “full compliance with commitments.” And more recently, the UK's Competition and Markets Authority issued a preliminary approval of the merger. Activision Blizzard CEO Bobby Kotick called it “a significant milestone for the merger” in a statement and said he remains optimistic that the deal will complete soon. The CMA's consultation on Microsoft's proposed changes is expected to be complete by October 6, just days ahead of the October 18 deadline for the CMA’s review process.
Normally, the FTC typically drops its challenges to deals when efforts are lost in federal court and despite the agency’s effort, this move will not delay the deal from going through. The likely worst-case scenario for Microsoft would be divestiture. Being forced to sell Activision or parts of it after the fact would not be ideal, but at least short term there seems to be little chance of the FTC derailing things.
The agency’s failed attempt to block the acquisition over the summer in the US should have put an end to the bargaining when the FTC’s injunction request to block the deal got rejected and the Ninth Circuit Court of Appeals denied the agency’s last-ditch effort. Judge Jacqueline Scott Corley said in her ruling that the FTC did not prove the deal would harm consumers.
Microsoft told Bloomberg that it's not overly concerned about the move preventing its purchase. Regardless of what impact it could have, the FTC’s in-house hearing will only start after the Ninth Circuit issues an opinion on the appeal, according to the filing.
In response to questions about this: we’re focused on working with Microsoft toward closing.
How the FTC uses limited taxpayer resources is their decision. https://t.co/4NTulgQeBA
— Lulu Cheng Meservey (@lulumeservey) September 27, 2023
Lulu Cheng Meservey, the CCO of Activision, said the company is focused on closing the deal with Microsoft. In a jab on X, the site formerly known as Twitter, she questioned the FTC for how it “uses limited taxpayer resources.”