Microsoft vs FTC Controversy: All You Need To Know| Major Key Points
Xbox owners will be able to close the acquisition of the owners of Call of Duty, Diablo, Warcraft and other big IPs for $69,000 million.
Here we have it! After a longer wait than initially expected, Judge Jacqueline Scott Corley today delivered her verdict in the Federal Trade Commission (FTC) case to injunctively stop the purchase of Activision Blizzard by Microsoft. There is still a lot of work to be done for the lawyers of the Xbox owners, but with this victory, the judicial panorama begins to become more than clear for the technological giant.
The Federal Trade Commission still has several business days to file an appeal. However, what Redmond wanted was to get the green light from the judge before July 18, the deadline by which he had to pay a clause of more than $3,000 million.
“Microsoft’s purchase of Activision has been described as the largest transaction in the history of the technology industry. This deserves to be investigated, and this scrutiny has paid off: Microsoft has committed itself in writing, in public and court to keep Call of Duty on PlayStation for 10 years in parity with Xbox. Has reached an agreement with Nintendo to bring Call of Duty to Nintendo Switch. And it partnered with different companies to bring Activision content to various cloud gaming services for the first time. The liability of this Court in this case is limited. It is to decide whether, despite these current circumstances, the merger should be halted, perhaps even rescinded, pending resolution of the Federal Trade Commission’s administrative action. For the reasons explained, the Tribunal finds that the Commission has not demonstrated the likelihood of prevailing in its claim that this particular vertical merger in this specific industry can substantially reduce competition… On the contrary, the evidence in the record points to greater consumer access to Call of Duty and other Activision content. Therefore, there will be no precautionary measures.”
In summary, the judge does not consider a proven risk that the acquisition of 69,000 million dollars by Microsoft reduces competition in the market, so she sees no reason to hinder the imminent closing of the operation.
Microsoft will have to battle in the UK
Microsoft has yet to focus efforts in the UK, where defeating the Competition and Markets Authority (CMA) is no easy feat with the odds stacked against them. However, the Competition Appeal Tribunal has expedited the process, and they could get validation for the case to go back to the UK regulator. In any case, a few weeks ago Bloomberg reported that Microsoft was looking for alternatives for Activision Blizzard games to be published in that territory without going through the regulator.
There are still a few countries left for Microsoft to receive approval, such as Turkey and New Zealand. The latter country expressed concerns a few days ago regarding the decrease in competition, but its decision will be communicated on July 17. Most likely, Activision Blizzard will merge definitively next Monday after learning about the decisions of the latest regulatory bodies. What will happen in the next few months is somewhat unknown, but based on the contracts that Microsoft has signed, we may start to hear news about Call of Duty soon.
Phil Spencer’s first reactions to this victory
This is long-awaited news for the Microsoft team, so we are not surprised to learn that Phil Spencer, head of Xbox, has shared some first words via Twitter regarding the outcome of the lawsuit with the FTC. As you can imagine, the manager expresses his feelings about the definitive response from Judge Scott Corley and, incidentally, reiterates that the plans around the purchase of Activision Blizzard consist of bringing the most popular franchises of the American developer to a greater number of players.
“We thank the court for quickly ruling in our favour. The evidence showed that the Activision Blizzard settlement is good for the industry and the Federal Trade Commission’s statements on console switching, multi-game subscription services, and cloud do not reflect the realities of the gaming market Since we first announced this agreement, our commitment to bring more games to more people on more devices has only grown. We have signed multiple collaborations to make Activision Blizzard games, Xbox first-party games, and Game Pass all available to a greater number of players. We know that players around the world have been closely following this case and I am proud of our efforts to expand player access and options throughout this journey.”
The FTC has also expressed itself after learning of its defeat, and in an email a spokesperson has indicated the following: “We are disappointed with this result given the clear threat that this merger represents to open competition in cloud games, the subscription services and consoles. In the coming days we will be announcing our next step to continue our fight to preserve competition and protect consumers”, comments Douglas Farrar via reports.
In the next few minutes there will likely be more reactions from industry personalities. But without a doubt, today Microsoft has taken a historic step to close the acquisition of Activision Blizzard and will soon be able to exercise creative control of such relevant franchises in the industry as Call of Duty, Diablo, Overwatch, Warcraft, etc. The future will be very different from today.