Importance Score: 65 / 100 🔴
FTC Withdraws Opposition to Microsoft’s Activision Blizzard Acquisition
The U.S. Federal Trade Commission (FTC) has abandoned its effort to prevent Microsoft’s $69 billion acquisition of Activision Blizzard, the company behind Call of Duty. The agency stated on Thursday that continuing the case against the now-completed deal was not in the public interest. This decision marks a significant shift in the landscape of video game industry mergers and acquisitions.
Shifting Priorities at the FTC
According to reports, FTC Chair Andrew Ferguson intends to direct the agency’s resources towards cases aligning with Donald Trump’s agenda. This includes an inquiry into potential collusion among advertisers to reduce spending on social media platform X.
Microsoft President Brad Smith welcomed the FTC’s choice, asserting that it represents “a triumph for gamers nationwide and for good judgment in Washington DC.”
Reversal of Earlier Initiatives
Ferguson is reportedly initiating the discontinuation of initiatives launched by his predecessor, Lina Khan. This encompasses the dismissal of a case accusing PepsiCo of engaging in price discrimination favoring Walmart, signaling a change in the FTC’s enforcement focus.
Previous Legal Battles
The FTC previously encountered setbacks on May 7th when its appeal to overturn a judge’s ruling, which declined to impede the Microsoft-Activision agreement, was unsuccessful. The deal was ultimately finalized in 2023.
In assessing mergers, the FTC typically requests a temporary injunction from a judge to prevent the deal from proceeding, giving the agency time to scrutinize it through its internal administrative court processes. However, deals that face temporary blocks are frequently abandoned altogether due to complications and increased uncertainty.
The Abandoned Trial
Even though the FTC failed in its attempt to temporarily halt the Microsoft acquisition, the agency retained the option to pursue a trial aimed at reversing the acquisition entirely. The trial had been scheduled for July.
Impact on the Gaming Market
The Activision Blizzard transaction represented the largest acquisition ever seen in the video gaming market. The FTC had argued that the merger would enable Microsoft to stifle competition for its Xbox console, as well as its subscription-based and cloud gaming services.