Microsoft wants to acquire the video game holding company valued at approximately $70 billion but the FTC is against the move for an anti-competition stance.
The Federal Trade Commission (FTC) filed for a temporary restraining order – in the United States District Court of Northern District of California, San Francisco Division – to seek a preliminary injunction for the acquisition of Activision Blizzard Inc (NASDAQ: ATVI) by tech giant Microsoft Corporation (NASDAQ: MSFT) for a whopping $70 billion. According to court documents filed on Monday, June 12, the FTC has been investigating the acquisition of the video game company on anti-competition matters. Moreover, the purchase of Activision Blizzard by Microsoft would make it the largest acquisition in the history of the video gaming industry.
FTC Doesn’t Approve the Move by Microsoft
Notably, the FTC initiated an administrative proceeding on December 8, 2022, to determine whether the proposed acquisition violates any of the anti-competition acts.
Similarly, the UK and Europe’s anti-competition agencies had issued similar warnings on the acquisition of the video gaming company by Microsoft. Moreover, Activision Blizzard publishes gaming products that are used by several consoles, PCs, and on mobile in a similar way that Microsoft does with the Xbox among other gaming products.
“On April 26, 2023, the United Kingdom Competition and Markets Authority (UK CMA ) issued a report finding that the Proposed Acquisition may be expected to result in a substantial lessening of competition in cloud gaming services in the United Kingdom,” the court filings noted.
According to Microsoft President Brad Smith, the move by the FTC and UK CMA is welcomed in order to accelerate the processes of finding Justice.
“We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market,” Smith noted.
Microsoft and Activision Blizzard Market Outlook
Following the announcement, Microsoft shares closed Monday trading at $331.85, up 1.5 percent from the day’s opening price. The MSFT shares continued with the bullish outlook in the after-hours with about a 0.65 percent gain. The ATVI shares, on the other hand, traded sideways on Monday after closing the day trading at around $79.77 and hovered at the same level in the after-hours. YTD, Microsoft shares have gained 38 percent while ATVI has added approximately 4.21 percent.
The Biden administration has significantly ramped up its effort on the enforcement of antitrust laws. Back in 2021, Biden signed a punitive executive order encouraging government agencies to enforce antitrust laws. As a result, Microsoft may be compelled to continue with its video gaming projects without Activision Blizzard.
The growth of Web3-focused games has significantly pushed traditional gaming companies to move in a similar direction. Meanwhile, it is the cloud computing technology that is set to make a difference in the growth of the video gaming industry in the coming years.
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Source: https://www.coinspeaker.com/ftc-order-activision-microsoft/