kingfey
Banned
https://www.protocol.com/newsletter...-blizzard-xbox-ftc?rebelltitem=6#rebelltitem6
THE FUTURE OF XBOX AND ANTITRUST
Microsoft’s planned acquisition of Activision Blizzard is the largest-ever deal in the video game market by a mile. The eye-popping price, combined with the scale and scope of Microsoft’s ambitions for its gaming business, has invited a rare level of scrutiny and attention for an industry that’s largely flown under the regulatory radar.The FTC is now in charge of reviewing the deal. With a newly empowered chair in antitrust expert and Big Tech critic Lina Khan and a Democratic majority, one big question stands out: Could the U.S. government block the deal, and on what grounds?
The chances of the FTC blocking the merger are low. Antitrust experts who I spoke with believe the deal is more than likely to succeed, but not without some strings attached.
- “It is very unlikely” the agency will block the deal outright, antitrust expert Aurelien Portuese, who leads a competition policy group at the Information Technology and Innovation Foundation think tank, told me.
- The combined businesses of Xbox and Activision Blizzard would only give Microsoft the No. 3 position in the gaming industry by global revenue, after Sony and market leader Tencent. “A blocked merger would be the best gift you can give to Sony or Tencent,” Portuese added.
- “The combination of Microsoft’s experience in software with Activision's creativity would seem to be a good fit in order to challenge bigger players,” Portuese said. “I think it’s going to be very hard for the FTC to argue that there’s a fundamental dominant position that will not be challenged in the near future.”
- “The one potential path to go forward is to go forward with some commitments like, ‘We won’t make XYZ content exclusive.’ They’ve said that publicly, but it’s different to get that in writing,” said Sumit Sharma, a Consumer Reports senior researcher who specializes in antitrust.
- For instance, Microsoft has already pledged to honor Activision’s existing contractual agreements with Sony’s PlayStation platform. But statements from the company give it wiggle room to change the arrangement as it sees fit in the future. The FTC, however, could demand the company keep Call of Duty multiplatform in perpetuity.
- “There’s always the ability for the FTC to potentially prosecute Microsoft for violation of the consent decree or even to unwind the merger,” Portuese said. He added that the FTC could do regular checks to ensure the company is abiding by the terms.
- The deal was instigated in part because of damning media reports about Activision Blizzard CEO Bobby Kotick’s knowledge of the company’s harassment and discrimination problem.
- A group of four U.S. senators called the deal a “cynical and ‘opportunistic’ attempt to capitalize off the systemic issues coming to light at Activision Blizzard,” in a letter urging the FTC to investigate.
- Workers themselves are speaking out, too. “We believe that the impacts on workers need to be taken into account, and if a deal is bad for workers, it should either be blocked or made to include enforceable commitments to respect workers' rights,” said Activision Blizzard design researcher Brice Arnold during an FTC and DOJ listening forum earlier this month.
- The FTC is said to be taking into account “the combined companies’ access to consumer data, the game developer labour market and the deal’s impact on those workers who have accused Activision of discrimination and a hostile workplace,” The Information reported in April.
- “How should we consider data in these big mergers?” Sharma asked. ”If there’s a big merger where there’s lots of data to be pooled, how should we consider whether this would give them market power, and can that be exploited? These are definitely questions that are being asked.”
“It’s moving fast, at least fast enough for an acquisition of this size,” Microsoft President Brad Smith said of the deal’s timeline in an interview last week with Belgian business publication L’Echo. “One of our attorneys summed it up nicely by saying, ‘We’re coming to the end of the beginning, and now we’re entering the beginning of the middle,’” Smith said, adding that the company will “respect the process.”
“I think it’s going to be a detailed review, it will take a fair amount of time,” Sharma said. “Microsoft has learned from its past and has become much better at dealing with regulators and competition authorities both in Europe and the U.S.”