US Federal Trade Commission to challenge Microsoft's $69 billion acquisition of Activision Blizzard

The US Federal Trade Commission (FTC) is preparing to take legal action in an attempt to block Microsoft's acquisition of Activision Blizzard. The FTC, responsible for enforcing antitrust law, had initially requested an administrative judge to block the transaction in early December. 

The agency argues that the acquisition would grant Microsoft's Xbox exclusive access to Activision games, leaving other gaming console manufacturers like Nintendo and Sony at a disadvantage.

"In light of that, and public reporting that Microsoft and Activision Blizzard are considering closing their deal imminently, we have filed a request for a temporary restraining order to prevent them from closing while review continues,” an FTC spokeswoman told Reuters.

While Microsoft's $69 billion bid to acquire the renowned video game developer was approved by the European Union in May, British competition authorities had previously blocked the takeover in April. Following this, the FTC is now looking to file a court order in the Northern District of California, as reported by a Reuters source.

"We welcome the opportunity to present our case in federal court," Microsoft president Brad Smith said in a statement.

On Monday, shares in Microsoft closed up 1 per cent, whereas Activision experienced a slight decline of 0.8 per cent. Microsoft has asserted that the proposed deal would bring benefits to both gamers and gaming companies, emphasising its willingness to sign a legally binding consent decree with the FTC. The decree would ensure that "Call of Duty" games are made available to rival companies, including Sony, for a period of ten years.

Activision Blizzard CEO Bobby Kotick sent an email to employees on Monday saying, "Our excellent legal team has been preparing for this move for more than a year, and we're ready to present our case to a federal judge who can evaluate the transaction on the merits. The facts are on our side, and we will continue to keep you updated throughout the process."

Experts in antitrust law suggest that the FTC faces a challenging task in convincing a judge to block the acquisition. Microsoft has made voluntary concessions to address concerns about potential market domination, which may weigh in its favour during legal proceedings.

The trial at the FTC's internal administrative court is set to commence on August 2nd.

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