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Businesses The Courts Microsoft

US Judge Temporarily Blocks Microsoft Acquisition of Activision (reuters.com) 40

Posted by BeauHD from the put-on-hold dept.
A U.S. judge has granted the FTC request to temporarily block Microsoft's acquisition of Activision Blizzard, scheduling a hearing for a preliminary injunction and preventing the deal from closing until a court ruling is made. Reuters reports: U.S. District Judge Edward Davila scheduled a two-day evidentiary hearing on the FTC's request for a preliminary injunction for June 22-23 in San Francisco. Without a court order, Microsoft could have closed on the $69 billion deal as early as Friday. Davila said the temporary restraining order "is necessary to maintain the status quo while the complaint is pending (and) preserve this court's ability to order effective relief in the event it determines a preliminary injunction is warranted and preserve the FTC's ability to obtain an effective permanent remedy in the event that it prevails in its pending administrative proceeding."

Microsoft and Activision must submit legal arguments opposing a preliminary injunction by June 16; the FTC must reply on June 20. Davila said the bar on closing will remain in place until at least five days after the court rules on the preliminary injunction request. The case reflects the muscular approach to antitrust enforcement taken by the administration of U.S. President Joe Biden.
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US Judge Temporarily Blocks Microsoft Acquisition of Activision More

US Judge Temporarily Blocks Microsoft Acquisition of Activision

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  • Just cancel it (Score:4, Insightful)

    by Midnight Thunder ( 17205 ) on Tuesday June 13, 2023 @10:13PM (#63600656) Homepage Journal

    Maybe they should simply cancel the buyout and deny any purchase where the business being bought is worth more than a billion.

    Basically we are dealing with too many large scale mergers or buyouts, which ends up giving too much control to too few players. At least thatâ(TM)s the impression I get.

    • Forgot to happen. This is the FTC trying to get a few concessions before the merger goes through. We have had decades of right wing pro corporate judges packing our courts combined with decades of right-wing politicians undermining regulators every chance they get. At this point it's not out of the question that the Supreme Court might rule the FTC is entirely unconstitutional, precedent be damned. Let's not forget that one of the justices couldn't name the five freedoms guaranteed by the first amendment du

      • Re: (Score:2)

        by tlhIngan ( 30335 )

        If you own a PlayStation 5 and you're a call of duty fan the best you can hope for is you'll get an inferior port for about 5 years after the buyout. And you can kiss Diablo and OverWatch goodbye. Unless of course you're willing to plunk down the cash for a Windows PC or an XBone. Meanwhile expect game prices to go up another 10 or 15 bucks and God help you if your OCD and vulnerable to microtransactions...

        That would be true, if Microsoft were say a European company more concerned with growing itself than

    • Its a decent enough idea, but that criteria doesn't currently exist. An arbitrary limit on company value barring aquisition would be the type of thing that needs to be handled via legislation, not just a "Meh I think this is a good idea so it should be so."

      • Re:Just cancel it (Score:5, Interesting)

        by ranton ( 36917 ) on Wednesday June 14, 2023 @12:33AM (#63600926)

        Its a decent enough idea, but that criteria doesn't currently exist. An arbitrary limit on company value barring aquisition would be the type of thing that needs to be handled via legislation, not just a "Meh I think this is a good idea so it should be so."

        You may be right that this wouldn't make it through the current pro-business Supreme Court, but the FTC has wide discretion on what would create a negative impact on competition in the industry. Biden signed an executive order in 2021 including 72 initiatives to improve competition in the marketplace. It specifically called out having greater scrutiny of mergers by dominant internet platforms. Now mergers can/should be stopped if they create a negative impact on competition, not just a negative impact on prices. It even allows the FTC to challenge prior mergers which past administrations did not previously challenge.

        But the legality of that executive order is likely to make it to the Supreme Court if the FTC starts to flex its new muscle. With the current make-up of the court I wouldn't bet on the FTC keeping many of these new powers.

        • You may be right that this wouldn't make it through the current pro-business Supreme Court

          No it wouldn't make it through any court because the point is the legislative framework for such a decision doesn't exist. Having greater scrutiny requires you to have ... err... scrutiny. The only possible thing to do is to analyse the market situation and make a decision based on competition. There's nothing to arbitrarily draw a line at a dollar value for company size.

          Incidentally a few other countries including the normally very aggressive EU have approved the mergers after looking at the competition, e

        • the basic idea that Congress can delegate discretionary power to regulators and bureaucrats. e.g. if it's not spelled out in statute then the agency can't do it.

          This goes against hundreds if not thousands of years of precedence, but when you're working backwards from your conclusion with a partisan Supreme Court anything is possible.

          Roberts sometimes gets a little worried about being remembered as a political hack though and does something like that Alabama Gerrymandering ruling, so anything's possi

          • Re: (Score:3)

            by ranton ( 36917 )

            This goes against hundreds if not thousands of years of precedence, but when you're working backwards from your conclusion with a partisan Supreme Court anything is possible.

            What exactly goes against precedence here? All that is being proposed is the FTC stating any merger between companies of a certain size has a negative impact on competition in the industry. It would probably work better if they set the threshold based on the size of the industry instead of a flat number like $1 billion market cap, but the concept is the same.

            The US gaming market is about $100 billion revenue per year. Microsoft made $16 billion and Activision Blizzard made almost $8 billion. This new compan

        • You may be right that this wouldn't make it through the current pro-business Supreme Court, but the FTC has wide discretion on what would create a negative impact on competition in the industry.

          The FTC has wide discretion on deciding to file a lawsuit. They can challenge damn near anything they choose. But it is still a matter to be decided by the court (unless the business in question agrees to settle via consent).

  • Who in government didn't get paid off.
    • It's more likely the FTC is going to try and get a few concessions for consumers before the merger goes through. These days the FTC doesn't really have enough power to solicit bribes. No one seriously thinks that they have the regulatory power combined with the backing of the courts to stop a merger like this. The last couple of make emergers to collapsed didn't collapse because of the FTC objecting they collapsed because the shareholders got cold feet

  • Why so much focus on Microsoft? (Score:5, Interesting)

    by GotNoRice ( 7207988 ) on Tuesday June 13, 2023 @10:19PM (#63600676)
    We have rampant monopolies everywhere. Google is the biggest monopoly that the world has ever seen, and no one seems to care. Others like Apple and Amazon are way up there also. Microsoft is actually fairly modest in comparison, in terms of the scope of their reach. If the government is going to actually tackle these monopolies, then great. But of all the things to focus on, why focus on Microsoft's acquisition of a game company? Did someone not send their "campaign contributions" to the right place?

    • Not sure how much it is Microsoft and how is simply bad timing? Are countries starting to react against the type of mergers that have gone through in recent years or is something more particular about this buyout and the history of Microsoft?

    • But of all the things to focus on, why focus on Microsoft's acquisition of a game company? Did someone not send their "campaign contributions" to the right place?

      If I had to guess, I'd say this is probably more about Sony throwing their lobbying weight around rather than anything Microsoft didn't do.

      As far as how it matters to consumers, this really isn't any different than how you have to own Nintendo hardware if you want to play Mario Kart. It's normally not even something most people think about, unless their friends are on the other platform. [youtube.com]

    • But it's for why the FTC can go after Microsoft it's that they're sufficiently disliked and this is such a gross overreach that Microsoft can't pretend this isn't going to have a negative impact on competition in the game industry. It also helps that the Biden administration changed the rules around mergers.

      Previously the rule was that the FTC had to show the merger would have negative impact on consumer prices and that the company could basically pinky swear not to raise prices and the merger would go

    • Re: (Score:3)

      by UpnAtom ( 551727 )

      Acquisitions are naturally considered by anti-monopoly depts. The proposed merger had already been ruled on by the UK and EU.

    • Re: (Score:3, Insightful)

      by xlsior ( 524145 )
      It's not illegal to be a monopoly; it's illegal to abuse a monopoly status, or to leverage a monopoly in one field to gain a monopoly in another.

      Microsoft being a convicted monopolist and repeatedly acting in bad faith in anti-competitive ways in the past heavily weighs against them when they are trying to consolidate and obtain a dominant position in other markets; this is a natural consequence of their own past transgressions.
      • You're talking about decades ago... it's actually laughable to think about how Microsoft abused it's "monopoly" via Internet Explorer compared to what Google is doing via Chrome now. Might as well go after AT&T again, as they are a "convicted monopolist" too, right? Since by your standards it doesn't matter if it happened generations ago.

        • It's not the poster's standards, it's *federal law* for inter-state corporations. Past bad acts do not "go away".
          This is another reason why mergers and acquisitions are *really* a bad idea (as opposed to simply buying the assets).
          The new company gets stuck with every old debt (conditional and/or undisclosed), warranty claim, lawsuit, super-fund site, etc.
          of the old companies.

          Also, federal employees use Microsoft products. This is an opportunity to "stick it" to a software vendor who gives
          them so much angs

    • Re:Why so much focus on Microsoft? (Score:4, Interesting)

      by Can'tNot ( 5553824 ) on Wednesday June 14, 2023 @04:38AM (#63601206)
      It's not about Microsoft, it's about Activision. Ignoring Tencent and Netease, Activision and Electronic Arts are the two largest third party publishers for consoles. By a significant margin, I think Take2 is 50-60% the size of either of those.

      So for one of the console makers to purchase one of the biggest publishers represents a significant consolidation of the market. Also, it's just a large merger in general. $70 billion is always going to draw scrutiny.
  • Gaming industry is very fragile business, the moods and interests changes really fast. Playing games is not the same as business software like MS Office, CRM or ERP software to migrate, gamers can move to a new game all at once, if something new emerges. Microsoft can pay 67 billion and write off everything next year

    • Microsoft can pay 67 billion and write off everything next year

      This is nonsense. Luxuries do well during recessions, especially games due to value for money, and they're not trying to buy a tiny studio with one title.

      • and they're not trying to buy a tiny studio with one title.

        yeah they already got a couple dozen of those, Minecraft being by far the biggest.

  • Re: (Score:2, Redundant)

    by account_deleted ( 4530225 )
    Comment removed based on user account deletion
  • Mergers reduce competition and hurt consumers.

  • If the US government wanted to show it was serious about enforcing anti-trust they would block the Kroger-Albertsons merger (something that seems far more anti-competitive and bad than the Microsoft-Activision merger)

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