KEY POINTS
The FTC filed a complaint Monday to block the acquisition from closing anytime soon
The court has set an evidentiary hearing for the preliminary injunction on June 22 and 23
The U.S. joins Britain in opposing the deal even as the EU gave its approval
Microsoft has been temporarily restrained from acquiring Activision Blizzard at least anytime soon after the Federal Trade Commission (FTC) filed a complaint seeking a restraining order and a preliminary injunction on the buyout deal.
“Microsoft and Activision shall not close or consummate their proposed transaction or a substantially similar transaction until after 11:59 p.m. Pacific Time on the fifth business day after the Court rules on the FTC’s request for a preliminary injunction,” the U.S. District Court for the Northern District of California said in an order Tuesday.
The order follows a complaint by the FTC which was filed Monday wherein it sought a restraining order and preliminary injunction on the Microsoft-Activision deal.
The FTC argued that a preliminary injunction was necessary “to maintain the status quo and prevent interim harm to competition during the pendency of the FTC’s administrative proceeding to determine whether the Proposed Acquisition violates U.S. antitrust law.”
The agency also explained that it filed the complaint since the two companies “represented” that they may close the deal at any time “without any further notice to the Commission.”
If the federal court grants the FTC’s request for an injunction, the regulator will have a chance to present its antitrust case against the tech giants before a deal is reached, according to The Verge.
An evidentiary hearing has been set for the preliminary injunction on June 22 and 23. Observers believe Microsoft and Activision Blizzard can’t close the deal this month due to the said hearing.
Following the FTC’s complaint, Microsoft president Brad Smith said the gaming giant welcomes “the opportunity to present our case in federal court.”
The court’s order came more than a month after Britain blocked the deal over concerns that it would have a negative effect on cloud gaming. The United Kingdom’s Competition and Markets Authority said it decided to block the buyout deal over concerns that it “would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for U.K. gamers over the years to come.”
The two companies said they would appeal the decision, with Activision even threatening to reassess its prospects in the country over the ruling’s possible effect on the deal in other countries.
Microsoft announced its plan to acquire Activision Blizzard in January 2022 – a deal that is expected to bring the “Warcraft” maker’s valuation to $68.7 billion.
“When the transaction closes, Microsoft will become the world’s third-largest gaming company by revenue, behind Tencent and Sony,” the company said at the time.
The deal is supposed to close before July 18, and if no negotiations are made to extend the deadline, Microsoft will be obligated to pay $3 billion to Activision as a breakup fee.
Despite opposition from the U.K. and Microsoft’s home country, the European Union gave its approval for the takeover. The European Commission said it approves the proposed acquisition but the approval was a “condition on full compliance with the commitments offered by Microsoft.”
The EU also clarified that its decision was based on an “in-depth investigation” and “hard evidence” as well as feedback and extensive information acquired from customers and competitors.
Amid questions about the EU’s split with the U.K. regarding the takeover bid, the bloc’s competition commissioner Margrethe Vestager explained that Microsoft made commitments on exclusivity that the bloc was satisfied with.
So far, there are 37 jurisdictions that have given their stamp of approval for the takeover bid, including Japan, China and Saudi Arabia.
Meanwhile, Activision recently agreed to settle with the Securities and Exchange Commission (SEC) for $35 million over the “Call of Duty” publisher’s handling of misconduct complaints.
The SEC said Activision Blizzard was aware that it could retain and motivate employees but it “lack controls and procedures” to analyze “employee complaints of workplace misconduct.”
The gaming giant also disclosed to the SEC that it found proof of misconduct in more than two dozen employee complaints following internal investigations and has made 39 corrective measures that included the termination of some employees.
The “Diablo” maker said it has established “robust procedures” to resolve various complaints including harassment, discrimination and retaliation.
Microsoft announced its bid to acquire Activision Blizzard in January 2022.
Reuters
2023-07-13 02:48:02
Article from www.ibtimes.com