As you may know, this week the legal proceedings regarding Microsoft's acquisition of Activision Blizzard took place, to which the FTC objects. The involved parties have presented their arguments, but the verdict has not been announced yet. When will it be revealed? What happens if the FTC wins? Will the purchase of Activision fall through?
Last Thursday marked the 5th day of the hearing, during which both the FTC and Microsoft presented their final arguments to persuade the judge to make her decision and issue the verdict, which would be crucial for the deal.
Why are the FTC and Microsoft in a legal battle?
Firstly, it's essential to understand why the FTC and Microsoft are in the midst of a legal battle. Clearly, the FTC wants to prevent the acquisition from happening, but this legal case is not specifically to "prevent" it.
The FTC is the plaintiff and opened the case with the aim of buying more time and obtaining a preliminary joint injunction from the judge, which would effectively prevent the acquisition of Activision Blizzard King from proceeding on the scheduled date, July 18, 2023.
Why does the FTC want more time? Because their objective is to block the acquisition, but to do so, they first have to participate in a separate lawsuit that they filed in December of last year, scheduled for August 2nd, in which they will present their final evidence to block the purchase.
What happens if Microsoft or the FTC win?
Therefore, whoever wins the battle does not determine the definitive fate of the acquisition. However, it is extremely crucial.
The problem is that if the FTC is granted this extension, it would significantly alter the agreement, and Microsoft would have to renegotiate the terms of the purchase with Activision Blizzard King, and they would be almost forced to abandon it, resulting in a $3 billion breakup fee to Activision.
On the other hand, if Microsoft emerges victorious, it would mean that the acquisition would proceed before the FTC presents its evidence. Although the FTC could fight back and potentially undo the deal, it would be an uphill battle, and it is not ruled out that the regulatory body might simply drop the case, similar to what happened with Meta and the acquisition of the virtual reality company Within, as mentioned by The Verge.
Microsoft has indicated that it was considering bypassing the United Kingdom if it is the only opposition, which added weight to the FTC's position, as denying the preliminary injunction would leave no other regulatory body to block the purchase (although it is likely that Microsoft will make every effort to convince the CMA as well).
"The injunctive relief requested by the FTC, therefore, would almost certainly scuttle the transaction," stated Microsoft (via The Verge) and mentioned that there is no need for the preliminary injunction because, even if the judge denies it, the regulatory agency could obtain effective relief at the end of the administrative process if they win [in their August hearing], and ultimately, they could force Microsoft to divest Activision Blizzard King.
When will the winner of the case be announced: the FTC or Microsoft?
Regarding the case that the FTC and Microsoft are awaiting a response to, after hearing the final arguments, Judge Jacqueline Scott Corley mentioned that it will not take her months to issue the verdict, jokingly, although she acknowledged that it is not a straightforward matter. It's important to note that judges, despite being well-prepared, may not have deep knowledge of these kinds of cases related to video games.
"I will do my best. It's complicated," said Judge Jacqueline Scott Corley.
Both the FTC and Microsoft still have until Monday afternoon to complete some procedural tasks. July 4th is a holiday in the United States, so, as mentioned by IGN, a verdict could be expected as early as Wednesday, July 5th, but it could arrive later.
Which side do you think will win the case? Let us know in the comments.
Stay informed with us, at LEVEL UP.
Comments
Best
New