FTC to handle review of Microsoft's deal for Activision Blizzard - Bloomberg

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• The review of Microsoft's (NASDAQ:MSFT) blockbuster deal to acquire Activision Blizzard (NASDAQ:ATVI) will be up to the Federal Trade Commission and not the Justice Dept., Bloomberg reports - a discouraging sign for the deal's prospects.
• That's because the FTC under Lina Khan - previously a vocal critic of big tech - has acknowledged taking an aggressive stance against dealmaking.
• In recent years the FTC and DOJ have come to agreements about dividing responsibilities to review antitrust concerns over major deals. And the FTC has sued to block two big ones so far: Nvidia's deal to buy Arm Ltd., and Lockheed Martin's proposed purchase of Aerojet Rocketdyne Holdings.
• The review will examine the combination of Activision Blizzard's robust game portfolio with Microsoft's hardware, and consider whether Microsoft could hurt rivals by limiting access to Activision's biggest games (these would include the annual best-seller Call of Duty series as well as World of Warcraft).

Comments

[GettingReal]

You can't compare the MSFT/ATVI deal with the other two deals. NVIDIA buying ARM represented a major loss of competition in chip design, while the reason for blocking the LM bid for Aerojet was because it gave them a huge trove of data on their major competitors. LM didn't even try to fight it. I don't see anything like the level of anti-competitiveness in MSFT buying ATVI. Xbox is an open platform and MSFT hardly have a monopoly of subscriptions. It'll go through.

[olde1two]

Let's see how long DC morons will screw around with this.
ATVI needs all the help it can get MSFT can and will fix it if there allowed to buy it. An if not ATVI will be 3 billion $ richer for it and will go down a path of uncertainly?

[Diesel]

It's stupid to block this merger. Just because a company is big doesn't mean it should be blocked from buying other companies. Microsoft is simply trying to enter a new market by buying ATVI which is perfectly legal. If we are going to set limits on how big companies can get, we are not capitalism anymore.

[The Fortune Teller]

@Diesel
Bingo!

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[pius_twelfth]

@Diesel It's not a new market for MSFT. The company is an established player in the mkt -- both software and hardware.

[JayPar]

@Diesel we’ve had limits on that for decades, and we are not 100% capitalist (nor should be) . That was done in the 1800s, the result being almost all wealth in the hands of a few oligarchs, the rest working for slave wages. That is the end game for pure capitalism. People are spoiled because they have never known a world like that, yet worship what the don’t know. Some sort of balance between greed and the public goodmust be maintained. But if this is not a monopoly (doesn’t look like it to me and we are talking about games after all not a necessity of life)should not be blocked.

[Ovidiu_Owner]

This is outrageous and the deal should be blocked. These giant monster companies need to learn the word NO. Time for politicians to do their damn job. America you've become so corrupted, Ray Dalio might be right about your fall.
Gamers don't need a monopoly ecosystem forcing subscriptions down everybody's throats. Once Microsoft and Sony have enough developers and their console ecosystems , no other smaller developers will sell s**t on their platforms....they'll sell their own. Eventually as a smaller developer you will only have access to their ecosystems as a cheap appetizer in their subscription models or none at all. This is monopoly they're building and needs to be teared down now, not later.

[Non-GAAP Earnings]

@Ovidiu_Owner there are many dozens of game studios and absolutely no barriers to entry. Your comment is way overboard

[pius_twelfth]

@Ovidiu_Owner There is nothing about this deal that gives MSFT an unfair competitive advantage. At the end of the day, the FTC and the DOJ are required to follow the law.

[JayPar]

@Ovidiu_Owner they aren’t blocking it from other platforms is what I heard. But if that is the problem all console specific software should be broken up

[Non-GAAP Earnings]

Unlike some of you commenters I don't have a clear crystal ball. Because of that uncertainty, I remind myself that there's a nice breakup fee for ATVI if the deal gets terminated.

[LordTimothyDexter]

@monkeywah only sensible comment

[dstb]

Microsoft better be ready to go to court.

[Karl Kelly]

Apple and Microsoft are my two biggest holdings. I think they are too big and powerful and need to prove that what they are buying isn’t anticompetitive. Personally I’d like to see them blocked on almost every deal. Big fish becoming whales ends up being bad for innovation

[tipper 1]

@Karl Kelly
Grow up

[Non-GAAP Earnings]

@Karl Kelly In addition to tipper 1's excellent comment I would add that you should look up the Xbox Creator Program. There are absolutely no barriers to entry if you are an independent studio and want to create a new game for Xbox, if you create games that people want to play.

[Karl Kelly]

@monkeywah It isn't about barriers, it is about absolute size. Once these companies get to large it will become almost impossible to challenge them.

[volpe21]

Better go look at Sony Bungie deal next, then, if that's the game we're playing

[JB170]

@volpe21 the scale isn't close to the same

[pius_twelfth]

@JB170 You're right. SONY is BIGGER than MSFT. Even with this deal, MSFT would be just the 3rd largest company by mkt share (15%).

[JB170]

@pius_twelfth I meant on the acquisition of each one. A 3.5B acquisition is nothing compared to a 70B. But Sony is bigger in taking revenue I know

[ComputerBlue]

China takes a harder stance on anticompetitive measures..us big tech can acquire anyone

[User 50042251]

Bad precedent if Sony the biggest player in the industry can acquire Bungie, Housemarque, Crunchyroll, invest in Discord within the span of a year all to strengthen their cross selling entertainment empire within movies and a music oligopoly. Tencent also just bought Turtle Rock Studios, Klei Entertainment, Sumo Digital and Fatshark. These are the only ones I can think of off the top of my head but they've done many more in the past year. Then the 3rd largest gaming company which is also the only American one, whose sole focus in entertainment is games can't buy a broken company which's every stakeholder especially employees want a new owner to fix it. Doubt Lina can spin this off without being disingenious and abusing her position.

[Claudius Odermatt]

@Firas Turak Microsoft will definitely win the case. The only question is how much political grandstanding they will have to endure.

[tipper 1]

@Firas Turak
Isn't that what Lina is known for??

[JB170]

@Firas Turak Microsoft has acquired lots of studios over the years. But Activision is the biggest independent game developer so the scale is far different. I would prefer Activision to stay independent or merge with another large player to keep a less centralized industry

[dmau3]

This deal will go through. MSFT has a lot of pals in DC.

[nicholas__t01]

@dmau3 they don't need pals in DC. They just need unelected, unbiased regulators to follow the law... Something the current inept administration seems to forget.

[Et20]

How can a company with dwindling subscribers hurt its rivals.
Don't see what's the big hoo-ha.

[Henry Vale]

If FTC blocks the merger, Microsoft can appeal, correct?

[thszda]

@Henry Vale with the right priced legal team, sure they can

[The Fortune Teller]

I don't know... One has to wonder (thus hope for):

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[Pinin]

This deal was never going through, anyway. Don't know why people ever thought it would.

[webchow]

@Pinin
Don't know why you thought it wouldn't.

[Pinin]

@webchow because it won't.

[pius_twelfth]

@Pinin Not only will the buyout be consummated, it will happen ahead of schedule. The combined company will have just 15% market share. One of those with bigger mkt share (Sony) just got bigger today. Also, we're talking about video games -- not pharma, energy, food or other necessities.

[Jclone]

facebook couldnt even get giphy... animated gifs lol. i will be shocked if this goes through

[easydom]

My original comment on this deal and the role of Kahn was removed from SA - but it was bang on minutes after the deal was announced and it was accurate.

Death kneel from a biased 32 year old academic that has no business in the role to begin with.

[marcoyolo]

This is government run amok. A video game is not a critical natural resource or service that can't be easily replicated. If Microsoft decided to make Call of Duty exclusive to Xbox and PC then a competitor could easily build their own competing first person shooter. In fact, this would be a foolish decision for Microsoft as it would simply open the market to other cross platform alternatives. Antitrust is being used as a tool for grandstanding bureaucrats to embed themselves into the affairs of private business and nothing more.

[pius_twelfth]

@marcoyolo I made a similar comment above. We're talking about video games -- not pharma, energy, food, etc. that consumers need. Even with the purchase, MSFT will have just 15% mkt share.

[blorber]

@marcoyolo right out of CCP playbook.

[careful investor 1]

It's video games. Govt employees with nothing better to do

[webchow]

@careful investor 1
Election year theatrics.

[Knife Is Falling]

@careful investor 1 could have a closer look at Elon's shenanigans instead. But this would require them to grow a pair I reckon.

[Cobra6]

World of Warcraft is a relic of the past, don’t know why it’s still being mentioned as if it’s important.