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"Microsoft-Activision Deal Inches Closer as Judge Rejects FTC's Injunction Request"

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Microsoft Acquisition of Activision Blizzard Gets Denied by Federal Judge

The FTC's Motion Denied

A federal judge in San Francisco has denied the Federal Trade Commission's motion for a preliminary injunction to stop Microsoft from completing its acquisition of video game publisher Activision Blizzard. The judge stated that the FTC has not shown a likelihood it will prevail on its claim that this merger may substantially lessen competition in the industry. This decision allows the FTC to file an appeal, and the two companies still need to resolve opposition from the Competition and Markets Authority in the United Kingdom.

Optimism and Hailed Decision

Activision Blizzard CEO Bobby Kotick expressed optimism and wrote in a memo to employees that the ruling is a signal for full regulatory approval around the globe. Microsoft also welcomed the decision, with President Brad Smith stating that the company is committed to addressing regulatory concerns and hopes for a timely resolution.

Court Hearings and Arguments

The decision comes after five days of court hearings to assess whether Microsoft would be able to proceed with its $68.7 billion acquisition of Activision Blizzard. The FTC argued that Microsoft may make games exclusive, while Microsoft countered that it aims to make Activision's titles more widely available, especially through its Game Pass library of games. CEO Satya Nadella and CEO Bobby Kotick testified during the hearings.

Looking Towards Europe

Now that the acquisition has been denied by the federal judge, Microsoft and Activision Blizzard are turning their attention to addressing concerns from the Competition and Markets Authority in the UK. The companies are considering modifications to the deal to address these concerns and have submitted a joint proposal to the Competition Appeal Tribunal. The litigation in the UK has been put on hold to prioritize work on these proposals.

Conclusion: The Impact of Microsoft's Failed Acquisition of Activision Blizzard on New Businesses

A Missed Opportunity for New Businesses

The federal judge's decision to deny the FTC's motion and allow Microsoft's acquisition of Activision Blizzard to proceed has significant implications for new businesses in the gaming industry. While this outcome may be celebrated by the parties involved, it raises concerns about the potential concentration of power and reduced competition, which can limit opportunities for emerging companies.

Challenges for Competition and Innovation

With Microsoft's dominant position in the technology industry and now with a major player like Activision Blizzard under its wing, new businesses may face increased challenges in competing and innovating. The fear of exclusivity and limited access to Microsoft's platforms and distribution channels may hinder the ability of smaller companies to gain traction and reach a wider audience.

The Importance of Addressing Regulatory Concerns

Microsoft's commitment to addressing regulatory concerns is commendable, and it emphasizes the need for companies pursuing mergers and acquisitions to prioritize fair competition and innovation. However, the resolution of regulatory issues can be a lengthy process, and new businesses may find themselves in a state of uncertainty while waiting for these matters to be resolved.

Opportunities in the European Market

As attention turns to addressing concerns from the Competition and Markets Authority in the UK, new businesses in the gaming industry should closely monitor the developments. The proposed modifications to the deal and the submission of a joint proposal indicate a willingness to address potential anti-competitive issues. For emerging companies, this situation presents an opportunity to influence the outcome and shape a more inclusive gaming landscape in the European market. In conclusion, the failed acquisition of Activision Blizzard by Microsoft highlights the challenges and potential risks new businesses may face in an industry dominated by major players. The outcome underscores the importance of maintaining a competitive market that fosters innovation and provides opportunities for the growth of emerging companies. Regulators play a vital role in safeguarding fair competition and ensuring a level playing field, and their decision-making process will significantly impact the future landscape for new businesses in the gaming industry. Article First Published at: https://www.cnbc.com/2023/07/11/microsoft-activision-deal-moves-closer-as-judge-denies-ftc-injunction.html

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