The 69-billion-dollar (90 trillion won) merger between Microsoft (MS) and Activision, dubbed the “deal of the century,” is on the verge of collapse.
The U.S. Federal Trade Commission (FTC) filed an antitrust lawsuit on the 8th (local time), claiming that Microsoft’s acquisition of ‘Activision Blizzard (Blizzard)’, a game company, could hinder competition. This is because MS can hinder market competition by restricting access to games of competitors other than Blizzard on its own game platform, ‘Xbox’.
Previously, in January of this year, MS drew attention by announcing its acquisition of Blizzard, a game company famous for ‘StarCraft’ and ‘Call of Duty’, at a cost of 90 trillion won. It also set a record as the largest merger and acquisition in the consumer-related information technology (IT) industry in history. With the acquisition of Blizzard, MS quickly rose to become the world’s third-largest game company after Tencent and Sony, and made a winning bid to preoccupy the future metaverse era.
However, as the FTC, the US Fair Trade Commission, raised an issue with the acquisition, the future success of the acquisition is expected to be eclipsed by the courts. “We believe this acquisition will further spur competition and create more opportunities for gamers and game developers,” said Brad Smith, president of Microsoft. We are perfectly confident (to win),” he said, expressing his position that he would fully explain his position in the lawsuit.
Analysts say that the FTC’s brake on MS-Blizzard’s acquisition is aimed at regulating mergers between big-tech platform companies more actively by Chairman Rina Khan, a strong big-tech regulatory advocate.
After taking office in June of last year, Chairman Khan has actively raised issues with mergers and acquisitions of not only Big Tech but also market-dominant businesses. Under pressure from the FTC, Lockheed Martin, the largest U.S. defense contractor, completely withdrew its plan to acquire Aerojet Rocketdyne, a rocket engine maker. Nvidia, a US graphic processing unit (GPU) company, also gave up its acquisition of ARM, a semiconductor design company. Recently, Meta is fighting a court battle with the FTC over the acquisition of VR app developer Within.
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