Microsoft Gave Encouraging Assurances on the Activision Blizzard Deal, Says US Rep
The Microsoft + Activision Blizzard deal will surely undergo regulatory scrutiny, given its enormous size (nearly $70 billion, the biggest acquisition in the US since 2019's Bristol-Myers Squibb - Celgene deal).
It looks like Microsoft has already begun testing waters beforehand, anyway. The Washington Post quoted US Congressman Ken Buck saying that the Seattle-based tech giant has already provided what he described as encouraging assurances on the matter.
They’ve suggested that they’re going to emphasize access to titles and competition in the marketplace as well as the individual gaming experience.
Ken Buck, a lawyer by trade and a politician elected to represent Colorado's 4th congressional district in the lower house of Congress as a Republican, is considered one of the foremost antitrust enforcement proponents in his Party. To have his early approval certainly means something, even though it'll still be far from smooth sailing for Microsoft.
For example, Alex Harman, a competition policy advocate for Public Citizen, stated:
Once again, Microsoft, one of the biggest of the Big Tech companies, is shamelessly gobbling up a competitor to try to strengthen its market position. No way should the Federal Trade Commission and the U.S. Department of Justice permit this merger to proceed.
Krista Brown, a senior policy analyst for the anti-monopoly group American Economic Liberties Project, added:
Although Microsoft has remained out of the antitrust hot seat, they are no less deserving of oversight. This transaction should trigger renewed scrutiny.
For his part, Microsoft's Head of Gaming Phil Spencer highlighted the exceedingly competitive market in the gaming industry.
This is an incredibly competitive marketplace in the gaming space. The truth is the largest gaming platforms on the planet are the mobile devices out there, distribution on those contents, control on those devices. It’s controlled by two companies. So you look at a company like Microsoft, and we’re bringing together content and intellectual property to offset the distribution capabilities we don’t have on mobile devices. This is our opportunity to fight to compete on the largest platform out there in gaming, which is mobile devices, that’s critically important to us and also as Bobby said, we have more creators on our platform than we’ve ever had. We have games coming from all, we have games coming from big publishers like EA and Activision and Take-Two. But you also look at a lot of homegrown games from small teams that are able to reach global scale because of the distribution that they’re finding on PC and gaming consoles. It’s an incredibly vibrant space right now.
Going back to Buck's quote, it's yet another indication that Microsoft may well avoid securing all Activision Blizzard as exclusives for its platforms, as pointed out by rumors and official sources alike, not to mention suggested by analysts. Such a move could prove instrumental in passing the scrutiny of regulators, as it would show them that massive games like the behemoth Call of Duty will still be available on platforms not owned or controlled by Microsoft.
According to sources cited by the New York Post, it is presently unclear whether the Department of Justice or the Federal Trade Commission will handle the merger. Ordinarily, it would fall under the DOJ's purview, but Assistant Attorney General Jonathan Kanter previously worked as a legal advisor for Microsoft for more than a decade. This could force Kanter to recuse himself, though that doesn't necessarily mean the deal would be handled by the FTC (usually perceived as comparatively harsher in the review work) instead.
As a reminder, Microsoft and Activision Blizzard are hoping to close the deal by June 2023. If it doesn't go through, Microsoft will have to pay Activision Blizzard between 2 and 3 billion dollars under the agreed terms.