Activision Blizzard Acquisition, Microsoft Has To Face A Line Of Cross-Country Rules

Microsoft Corp's acquisition of Activision Blizzard Entertainment has made headlines today. (photo: doc. activision blizzard)

JAKARTA - Microsoft Corp's acquisition of Activision Blizzard Entertainment has made headlines today, as the US Federal Trade Commission (FTC) and the Department of Justice (DOJ) will announce their joint plan to review Big Tech's merger guidelines.

Today, January 19th, the FTC has also quietly begun an initial investigation of the $400 million Meta deal with VR company Supernatural.

That's coincidental, but on the other hand, the two government agencies want to gather public comment on the current state of the mergers and acquisitions law, draft updated guidelines, and seek further input before the end of the year.

Microsoft's acquisition of Activision Blizzard is unlikely to be finalized until 2023, and even if the $68.7 billion deal has been made official, Microsoft will still have a lot of complicated situations to work on once the issues are resolved.

However, there is still more than enough time to be safely under the scrutiny set by the new FTC and DOJ merger rules. Mergers of this size must be approved by regulatory agencies, notably the FTC, DOJ, US Security and Exchange Commission, and possibly the European Union.

While such deals are often unhindered, both the FTC and the European Union have recently grown increasingly hostile to the idea of major technology acquisitions for fear that further consolidation could lead to dangerous monopolies.

One question floating around is whether Microsoft's new deal will be treated as a technology acquisition or an entertainment acquisition? While big technology has come under scrutiny over the last few years.

For example, entertainment deals like Disney's acquisition of Fox have met with fewer antitrust issues. While Microsoft is undoubtedly one of the biggest tech companies in the world, it's possible that video game material will keep this deal on the entertainment side of the FTC and EU radars.

But, since Microsoft has positioned this deal as a key game in the metaverse, it's still possible it could pose some red flags.

If this is considered a major tech deal, then it is likely to face increased scrutiny. The recently appointed head of the FTC, Lina Khan, is likely to be tougher on big technology than the previous head of the organization.

Likewise, US President Joe Biden issued an Executive Order in July announcing his administration's intention to protect economic competition, particularly in the area of technology.

In fact, just hours after Microsoft's announcement, the FTC announced that it was starting the process of modernizing merger guidelines for large companies especially in the digital space, which could have a major impact on this particular deal. Although again this is a coincidence.

There will always be independent game developers, but the more game companies consolidate, the harder it will be to compete. Microsoft's resources will always exceed those of the nearest indie game maker. Thus quoted from Polygon and TechRadar, Wednesday, January 19.