Posts Tagged: Activision

FTC appeals ruling that would have let Microsoft’s Activision takeover move forward

The Federal Trade Commission isn't giving up on its attempt to halt Microsoft's pending $ 68.7 billion purchase of Activision Blizzard. The agency said in a filing it's appealing Judge Jacqueline Scott Corley's denial of its request for a preliminary injunction to temporarily stop the deal from going through.

The FTC has sued to prevent the merger from happening over antitrust concerns. An administrative trial is set to start in August, but the companies have a merger deadline of July 18th. The agency was concerned Microsoft and Activision would close their deal by then despite a UK regulator blocking the deal in that country.

Bloomberg first reported that the agency was considering an appeal against Corley's decision. The FTC told Engadget after Tuesday's ruling that it would announce its "next step to continue our fight to preserve competition and protect consumers" in the following days.

Corley ruled that, unless the FTC obtains an emergency stay from the Ninth Circuit Court of Appeals by 11:59PM PT on July 14th, a temporary restraining order that's currently preventing Microsoft and Activision from closing the deal will be dissolved. The restraining order was put in place until Corley made a decision on the preliminary injunction. 

Meanwhile, after Corley's ruling, Microsoft, Activision Blizzard and the UK's Competition and Markets Authority said they agreed to pause their legal battle and see if they could reach a compromise. The CMA later clarified that although "merging parties don’t have the opportunity to put forward new remedies once a final report has been issued, they can choose to restructure a deal." It added that doing so could lead to a fresh merger investigation.

"The District Court's ruling makes crystal clear that this acquisition is good for both competition and consumers," Microsoft president and vice-chair Brad Smith said in a statement posted to Twitter. "We're disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward."

"The facts haven’t changed. We’re confident the US will remain among the 39 countries where the merger can close," Activision Blizzard said in a statement to Engadget. "We look forward to reinforcing the strength of our case in court, again.”

Update 7/12 9:10PM ET: Added Activision's statement.

Update 7/12 10:19PM ET: Added Brad Smith's statement.

This article originally appeared on Engadget at https://www.engadget.com/ftc-appeals-ruling-that-would-have-let-microsofts-activision-takeover-move-forward-231729137.html?src=rss
Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics

Microsoft and UK regulators agree to pause legal fight to negotiate Activision acquisition

On the same day a US federal judge denied the Federal Trade Commission's request for a preliminary injunction to prevent Microsoft from buying Activision Blizzard for $ 68.7 billion, the tech giant and the United Kingdom's Competition and Markets Authority (CMA) said they have agreed to take a break from their legal battle to negotiate a compromise that could allow the deal to move forward. 

"After today’s court decision in the US, our focus now turns back to the UK. While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA,” Microsoft President Brad Smith posted to Twitter. "In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of the litigation in the UK would be in the public interest and the parties have made a joint submission to the Competition Appeal Tribunal to this effect."

The CMA said it would block Microsoft's bid to buy Activision Blizzard at the end of April. At the time, the regulator argued the deal would harm the nascent cloud-gaming market by creating a monopoly player in Microsoft. It added, if the acquisition were to move forward as planned, Microsoft would have an "incentive to withhold [Activision Blizzard] games from competitors and substantially weaken competition in this important growing market." Microsoft had planned to challenge the decision, with a preliminary hearing before the Competition Appeal Tribunal (CAT), the body that hears appeals on CMA decisions, set for July 28th. In a statement the regulator shared with The Verge, it said it was "ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our Final Report.” The CAT still needs to allow the two sides to negotiate, but the tribunal is more than likely to rubber stamp the request.

This article originally appeared on Engadget at https://www.engadget.com/microsoft-and-uk-regulators-agree-to-pause-legal-fight-to-negotiate-activision-acquisition-165856989.html?src=rss
Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics

FTC sues to block Microsoft’s Activision Blizzard merger

The Federal Trade Commission has filed an antitrust complaint in a bid to block Microsoft's planned $ 68.7 billion takeover of Activision Blizzard. The FTC started looking into the deal and its potential impact on the video game market soon after it was announced in January. Evidently, the agency was concerned enough to try and pump the brakes on the buyout. The FTC said that, were the deal to go through, it "would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business."

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” Holly Vedova, director of the FTC’s Bureau of Competition, said in a press release. “Today, we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

The FTC's commissioners voted in favor of the lawsuit along party lines, with the three Democratic members approving it. The lone Republican Commissioner Christine S. Wilson voted against the suit in a closed-door meeting.

"The FTC pointed to Microsoft’s record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer)," the agency said in a press release. "Microsoft decided to make several of Bethesda's titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles."

While the lawsuit doesn't necessarily kill the deal, it's unlikely to be resolved by July, as Politico, which had reported that an FTC bid to block the merger was likely, recently noted. That was the deadline Microsoft and Activision set for closing the deal. If the acquisition hasn't closed by then, the companies will have to renegotiate the agreement or even walk away from the merger. Regulators in other jurisdictions have been taking a close look at the deal, including in the UK and the European Union (which should complete its investigation by late March). 

Sony is the merger's most prominent opponent. It has expressed concern that Microsoft would make games such as Call of Duty exclusive to Xbox platforms, which could cost Sony hundreds of millions of dollars a year. However, Microsoft has said it wants to keep Call of Duty on PlayStation and it claims to have offered Sony a 10-year agreement to that effect.

Just ahead of the FTC's vote, Microsoft said it struck a deal with Nintendo to bring Call of Duty games to the company's systems if the merger closes. Call of Duty will also remain on Steam as part of a separate pact with Valve.

Microsoft and Activision have been downplaying the significance of the deal in an attempt to appease regulators and push it through. For one thing, Microsoft has claimed that Sony has more exclusive games, "many of which are better quality," in a filing with the UK's Competition and Markets Authority (CMA). It also said Activision Blizzard doesn't have any "must-have" games, despite having some of the most popular titles in the world (including Call of Duty: Modern Warfare II, Overwatch 2 and World of Warcraft) under its umbrella.

The FTC refuted those suggestions in its complaint. The agency claimed that Activision is "one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices." It noted that between franchises such as Call of Duty, World of Warcraft, Diablo, and Overwatch, Activision has more than 154 million monthly active users.

Microsoft has suggested that the acquisition the deal is more about gaining a foothold in the mobile gaming market, where Activision's King division is a major player. For instance, Candy Crush Saga has had more than 3 billion downloads.

Ultimately, the FTC believes that the merger would likely harm competition in the video game market. "With control over Activision’s blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely, resulting in harm to consumers," the agency said.

Noting that the FTC is suing to block the merger, Activision Blizzard CEO Bobby Kotick wrote in a note to employees that "This sounds alarming, so I want to reinforce my confidence that this deal will close. The allegation that this deal is anti-competitive doesn't align with the facts, and we believe we’ll win this challenge." 

Kotick added that "a combined Microsoft-[Activision Blizzard King] will be good for players, good for employees, good for competition and good for the industry. Our players want choice, and this gives them exactly that."

"We continue to believe that our deal to acquire Activision Blizzard will expand competition and create more opportunities for gamers and game developers," Microsoft president Brad Smith wrote on Twitter. "We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believe in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present it in court."

Update 12/8 2:58PM ET: Added comments from Bobby Kotick and Brad Smith.

Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics

CWA accuses Activision of threatening employees for discussing work conditions

The union working to organize Activision Blizzard workers — the Communications Workers of America — filed a complaint today with the National Labor Relations Board (NLRB), accusing the video game company of forbidding workers from discussing ongoing sexual and workplace harassment lawsuits. This isn’t the first time Activision has been accused of shutting down workplace dissent. Last September, CWA accused Activision of union-busting and intimidating workers who engaged in walkouts and other protests.

CWA filed its latest complaint after an incident in which an Activision worker posted a link to an article on their departmental Slack channel about an ongoing California Department of Fair Housing and Employment lawsuit against the company. The union shared no details about whether the worker was fired or reprimanded. Engadget has reached out to CWA for more information about the incident and will update when we hear back. Under federal law, employees have the right to discuss matters relating to wages, hours and working conditions.

Former Blizzard test analyst Jessica Gonzalez said Activision used “similar tactics” during her time at the company after she spoke out about workplace sexual harassment. “It is unfortunate that Activision continues to take the low road, but my hope is that everyone in the video game community understands how having a union on the job can encourage a workplace free from harassment and discrimination, which translates to better video games,” said Gonzalez in a statement.

Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics

Microsoft opened Activision acquisition talks three days after CEO harassment report

When Microsoft announced it would spend $ 68.7 billion to buy Activision Blizzard to bolster its Xbox gaming division, the news came as a surprise to many. For months, the troubled publisher had been in headlines stemming from the workplace sexual harassment lawsuit filed by California’s fair employment agency in July. The bad press hit a fever pitch on November 16th after The Wall Street Journal published a report that asserted Activision CEO Bobby Kotick had not only known about many of the incidents of sexual harassment that had occured at the company but had also acted to protect those who were responsible for the abuse.

Days after that article came out, Xbox chief Phil Spencer reportedly told employees he was “distributed and deeply troubled by the horrific events and actions” that allegedly took place at Activision Blizzard and that Microsoft would re-evaluate its relationship with the publisher. It’s one day after that email that Spencer called Kotick to start the process that would end with Microsoft announcing plans to buy Activision Blizzard some two months later, according to a US Securities and Exchange Commission filing first spotted by CNBC.

Starting on page 31 of the document, Microsoft devotes nearly 10 pages detailing the timeline of its talks with Activision. According to the filing, Spencer told Kotick during their November 19th phone call that “Microsoft was interested in discussing strategic opportunities” between the two companies and asked if he had time to talk to Microsoft CEO Satya Nadella the following day. That Saturday, November 20th, Nadella made it clear Microsoft hoped to purchase the publisher, stating the company was “interested in exploring a strategic combination with Activision Blizzard.”

It turns out the quick pace at which the talks moved was mainly due to all the other companies interested in buying up Activision Blizzard after its stock dived in November. At least four other companies contacted the publisher about a possible acquisition. None of them are named in the SEC filing. However, one notably wanted to just buy Blizzard. Activision didn’t move forward with that option because the company’s board of directors deemed the sale would have been too difficult to pull off.

The document also details the terms of the purchase agreement. If the deal doesn’t go through due to antitrust complications, Microsoft has agreed to pay Activision Blizzard a termination fee of up $ 3 billion. A few years ago, that’s a possibility Microsoft probably wouldn’t have had to worry about too much, but 2022 finds the company in a very different regulatory environment. At the start of the month, NVIDIA abandoned a $ 40 billion bid to buy ARM after the Federal Trade Commission sued to block the purchase. President Biden appointed Lina Khan, the Commission’s current chair, to the position on the strength of her experience in antitrust law. When the NVIDIA-ARM deal fell through, the agency specifically noted it was "significant" because it "represents the first abandonment of a litigated vertical merger in many years." 

Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics