FTC seek settlement in Xbox’s Activision acquisition

Microsoft’s acquisition of Activision Blizzard (and King) has been pretty hot news throughout 2022 and as we hit 2023 it looks like more of the same,
Today, 3rd January marks the first milestone in the FTC’s case against Microsoft’s purchase of Activision. Marked as the “Preliminary hearing” it’s our first look at what to expect over the coming months.

Depending which side of the fence you look at, many against Xbox (unsurprisingly mostly self-declared Playstation fans) seem to think that the court case spells big trouble for Microsoft and Xbox, while others are more supportive feeling that the FTC are simply using their own internal court case to try and ensure they receive the necessary concessions from Xbox to allay any fears about the merger and quite possibly, stop PlayStation from complaining about it.

One source close to the case is Leah Nylen of Bloomberg who specifically covers anti-trust and cases similar to the Microsoft Activision acquisition. Nylen has tweeted coverage of today’s hearing, and while details are a little thin on the ground, it’s starting to sound quite positive for Microsoft, Xbox and Activision Blizzard.

ALJ Chappell says many more people called in than expected so the AT&T teleconference line got swamped, even after they doubled the access.

— Leah AntiTrustButVer1fy Nylen (@leah_nylen) January 3, 2023

The first tweet outlined a few connection issues, but thankfully it wasn’t long before important details started to surface.

Just a few lines say a thousand words…

FTC lawyer James Weingarten said the agency has no plans "at this time" to file in federal court. The FTC has authorized staff to engage in settlement talks but "there are no substantive discussions at this time."

— Leah AntiTrustButVer1fy Nylen (@leah_nylen) January 3, 2023

Declaring that the FTC has no plans (at this time) to file in federal court, it certainly sounds like the FTC feel they either
A. don’t have a strong enough case.
B. Already have enough concessions promised by Microsoft.
C. Feel an agreement between FTC and Microsoft is “within reach”

It could quite easily be all of the above, but the second point, that the FTC have authorized staff to engage in settlement talks, further outlines that the end could be a little closer than we anticipated.

The final point “no substantive discussions at this time” is a moot point, as Microsoft also made it clear, they are awaiting the results from EU and UK authorities before finding a solution with the FTC.

Microsoft at preliminary hearing before FTC ALJ Judge Michael Chapell:

"We expect the EU and UK to settle soon, possibly with remedies and then go to the FTC with those results to expedite the FTC's resolution."

MSFT says neither EU or CMA has not issued a block to the deal. pic.twitter.com/0K9l7UZWgE

— Idle Sloth💙💛 (@IdleSloth84_) January 3, 2023

It’s certainly clear Microsoft feel like everything’s under control and are confident of finding a solution (remedies) to ensure the acquisition will settle (pass) in the UK and EU, and then Microsoft will likely return to the FTC with those same remedies, to find a final solution with the FTC.

While some have suggested the acquisition drama could continue through 2023 and even into 2024,
This final tweet, confirms Microsoft are expecting this to be all tied up by the summer, possibly before.

Microsoft is prepared to go to federal court.

"We assume the FTC would make the decision to go to federal court and we want to frontload that evidential period."

Termination date of deal is July 18th, 2023.

Microsoft expects a resolution or decision in the "next few months." pic.twitter.com/smISOMup0m

— Idle Sloth💙💛 (@IdleSloth84_) January 3, 2023

We’re pretty sure we’ll be hearing plenty more over the coming months, so keep an eye on the oldies, because we’ll post more news as we get it.

About Author