The last few months have been complicated by Microsoft since the Federal Trade Commission (FTC) has chosen to block the takeover of Activision Blizzard King by Microsoft under the current conditions. Nothing is set in stone yet, but Microsoft is now in a race against time to close the deal before July. And if necessary, the American company ignores the opinion of the jurisdiction of the United States to the point of risking a lawsuit in federal court.
European and British decisions will be decisive
As mentioned in our columns this morning, the preliminary hearing of the FTC which was held yesterday evening made it possible to know a little better the intentions of the American antitrust organization, chaired by Lina Khan. We learned that the agency was not planning “for the moment” to go to federal justice, and rather to settle this internally as a first step.
The FTC said it was open to engaging in negotiations, but also clarified that there were no “substantive discussions at this time”. But today we are learning more from MLex, which produces market and regulatory risk analysis for law firms, corporations and hedge funds. Words reported by Idas on Resetera, which is following the case very closely.
According to MLex, any potential solution reached with the European Commission and the CMA (UK) will also be proposed to the FTC. Beth Wilkinson, senior counsel for Microsoft, commented that “The agreement is under review in Europe and the UK and we expect it to be resolved and, if corrective action is appropriate, we we can come back to the FTC to discuss a solution”.
The upcoming schedule will therefore be decisive for Microsoft since two large jurisdictions are still in phase 2 of the examination of the file, namely the CMA and Europe. Interim findings from the CMA are expected this month with a final report in March while Europe has until early April to rule, but could do so soon.
Microsoft is preparing for “all options”
Also according to the same information collected by MLex, attorney Beth Wilkinson told Administrative Judge D. Michael Chappell that if a solution was not found with the FTC, the agreement would be pursued and concluded after a solution was found. found in all current jurisdictions.
This is a major element in the takeover case since Microsoft would then rely on the European authorities to move forward, including if the FTC still refuses to give it its blessing under the terms in force. “We are preparing for all possible solutions”said Beth Wilkinson.
If Microsoft obtains the green light from the CMA and the European Commission, and the FTC sticks to its position, Microsoft will therefore choose to conclude the operation, justifying validation by other global bodies sufficient to prove that there is no there is no risk for competition in the sector.
The FTC can then sue Microsoft in federal court, but Microsoft will certainly defend itself using the arguments of the various antitrust jurisdictions that have approved the takeover. The position of the FTC will therefore be quite delicate, knowing that several experts have already judged the file and the arguments of the FTC not very solid with regard to the world video game market. One thing is certain, Microsoft intends to fight until the end and seems confident to close the takeover before July 2023.
Microsoft lawyer Beth Wilkinson is not just anyone. She is best known for successfully advocating for the execution of Oklahoma City bomber Timothy McVeigh. For this case to be concluded, Microsoft has surrounded itself with renowned lawyers. The documents filed by Microsoft with the UK Competition and Markets Authority (CMA) also bear the name of the major US firm, Weil Gotshal & Manges. A first response from the CMA is expected for the next few weeks, or even the next few days.
