Microsoft shares rally despite clash with FTC over ‘harm’ caused by Activision deal
Microsoft shares rose yesterday despite the company having to go to court with the FTC over its attempt to acquire Activision Blizzard.
Shares in Microsoft rallied yesterday (June 22) by 1.84 percent to $339.71 despite the company’s ongoing legal woes.
The US Federal Trade Commission (FTC) is arguing in federal court for a preliminary injunction to block Microsoft’s acquisition of Activision Blizzard.
The agency is calling for a judge to block Microsoft’s $69billion merger with the video game company.
This is reportedly needed so the FTC’s in-house court can determine whether the deal hurts competition within the video game industry.
As it stands, the deal would give Microsoft’s X-Box console exclusive access to Activision games while competitors like Nintendo and Playstation will have no access.
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Yesterday, FTC lawyer James Weingarten delivered the agency’s opening arguments on the first day of a five-day hearing.
He said: “If this deal is completed, the combined company ... is likely to have the ability, an incentive, to harm competition in various markets related to consoles, subscription services and the cloud (for gaming).”
In her opening arguments, Microsoft’s lawyer Beth Wilkinson outlined why the company believes the deal will benefit consumers in the long term.
She explained: “I think you will see that every piece of evidence shows that it only makes sense for Xbox to make these Activision games available to as many people on as many platforms as possible.”
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Ms Wilkinson noted that a potential injunction could lead to a three-year administrative proceeding that would end the deal.
Later today (June 23), Microsoft Gaming CEO Phil Spencer, senior Microsoft finance director Jamie Lawver and Sony Interactive Entertainment CEO Jim Ryan will appear in court via video deposition.
The hearing is currently scheduled to take place on June 29 with Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick.
The technology corporation’s fight to merge with Activision Blizzard has been carried out in antitrust battles around the world.
While the European Union have the green light for the acquisition to take place, the UK blocked the bid in April.
Currently, the FTC is arguing the deal will give Microsoft the "ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition”.
In response, the company has stated the acquisition will benefit gamers and the market with Microsoft offering to sign a legally binding consent decree with the federal agency to give Call of Duty games to rivals for 10 years.
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