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Republican Lawmakers urge FTC to End its Opposition to Microsoft's Activision Blizzard Acquisition

CIO Insider Team | Wednesday, 19 July, 2023
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Twenty-two Republican lawmakers urged the Federal Trade Commission to end its opposition to Microsoft's acquisition of video game developer Activision Blizzard, describing it as ‘an example of the FTC's rejection of sound antitrust policy’.

In a letter to FTC Chair Lina Khan and two commissioners that was sent on Monday and made public on Tuesday, the politicians, who are all members of the Republican-controlled House of Representatives, claimed that the proposed merger is a ‘pro-competitive transaction’.

After a US District Court judge last week determined that the purchase was permissible and an appeals court rejected an emergency plea to block the transaction, the agency that enforces antitrust law is now weighing its options.

The $69 billion agreement, which was slammed by American and British antitrust officials, has been fought for months by Microsoft, the company that makes the Xbox video gaming console, but it now seems to be close to being completed. The purchase of "Call of Duty" video game developer Activision would be both the largest acquisition for Microsoft and the video game industry overall.

To give the parties more time to resolve their differences, a London tribunal earlier formally paused Microsoft's appeal against Britain's rejection of its $69 billion acquisition of Activision Blizzard.

"The addition of Activision's portfolio is intended to help Xbox make these games available to a wider set of consumers, especially those who prefer to play on mobile devices."

Microsoft, Activision, and Britain's antitrust watchdog, the Competition and Markets Authority (CMA), had all asked for a two-month stay of the case after the CMA said it would consider a modified settlement proposal from Microsoft.

According to the Competition Appeal Tribunal (CAT), Microsoft's appeal hearing has been postponed. The hearing was originally slated to begin on July 28.

Judge Marcus Smith said he would be likely to postpone next week's hearing if the CMA provided evidence for why it thinks there has been a significant change in circumstances or an unusual cause justifying its request for an adjournment.

James Comer, chair of the House Committee on Oversight and Accountability, and Jim Jordan, chair of the House Judiciary Committee, are among the signatories of the letter. These two committees this week questioned Khan about legal battles the FTC fought and lost over multi billion-dollar mergers.

"The latest, and most egregious, example of the FTC's rejection of sound antitrust policy was the decision to seek a preliminary injunction against a pro-competitive transaction, Microsoft's proposed acquisition of Activision," the lawmakers wrote.

"For two decades, Microsoft's Xbox business has been the much smaller challenger in the video game publishing and video game console markets," they added. "The addition of Activision's portfolio is intended to help Xbox make these games available to a wider set of consumers, especially those who prefer to play on mobile devices."

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