Federal Judge to Rule on Microsoft's $69 Billion Acquisition of Activision Blizzard

A federal court will decide whether Microsoft should acquire video game firm Activision Blizzard, which may be the most costly tech merger ever.

To stop the $69 billion transaction, US antitrust authorities have launched a complaint, claiming that it will impede competition between Microsoft and competitors in the sector like Sony and Nintendo.

Microsoft has been making a strong case for the merger during the five-day San Francisco court hearing with CEO Satya Nadella and other officials testifying, per AP News.

The US Federal Trade Commission (FTC), which enforces antitrust laws, has asked for an injunction to delay the Microsoft-Activision agreement's execution until an internal FTC court can assess it in August. Microsoft and Activision are concerned that a major delay would force them to terminate their 17-month deal. To counteract this, Microsoft has agreed to pay Activision a $3 billion breakup fee if the acquisition is not finalized by July 18.

In a final written response, Microsoft's lead attorney, Beth Wilkinson, said that the FTC's requested remedy was unusual and possibly game-changing. Nadella, Kotick, and other Microsoft witnesses have underlined the need to maintain titles like Call of Duty accessible across platforms throughout the session to allay concerns from players.

Company Officials Face The Court

According to Microsoft's CFO, Amy Hood, the prospect of having Call of Duty Xbox-only was never evaluated or brought up in any presentations or conversations with the Board of Directors.

James Weingarten, the senior counsel for the FTC, aimed to refute Microsoft's assertions that exclusivity was not a top concern.

Tim Stuart, CFO of Microsoft's Xbox business, was questioned by Weingarten regarding internal strategy conversations around the Activision Blizzard acquisition and Microsoft's prior $7.5 billion purchase of Zenimax in 2021.

A Case Crucial to FTC

Despite UK Competition and Markets Authority's opposition, the European Union and other states have approved Microsoft's purchase of Activision.

The federal court's ruling will shape the case. The Federal Trade Commission could withdraw its lawsuit if the court favors Microsoft.

FTC Chair Lina Khan filed the most significant case while in office, focused on a Big Tech corporation, and sought to block Microsoft's purchase of Activision. Observers have been keenly anticipating Khan's activities on Big Tech mergers since her surprising appointment as the head of the consumer protection and competition agency in June 2021, according to Vox.

It was generally assumed that Khan would ultimately oppose a merger, and the question was only which merger and when.