regulatory bodies, including one by California’s Department of Fair Employment and Housing, one by the Securities and Exchange Commission, and one by the U.S. The instances were brought to light largely because of various official legal complaints filed by U.S. Since July 2021, Activision Blizzard has come under heavy fire from all sides because of accusations of toxic and allegedly criminal behavior in and around its workplace. In fact, just a few hours after Microsoft’s announcement, the FTC announced that it’s starting a process to modernize its merger guidelines for major companies especially in digital spaces - which could have a major effect on this particular deal. The recently appointed head of the FTC, Lina Khan, is likely to be tougher on big tech than previous heads of the organization, and President Biden issued an Executive Order in July that announced his administration’s intention to protect economic competition, particularly in tech. If this is deemed a big-tech deal, then it will likely face increased scrutiny. However, as Microsoft has positioned this deal as an important play in the metaverse - a decidedly big-tech dominated space - it’s still possible it could raise a few red flags. While Microsoft is undoubtedly one of the biggest tech companies in the world, it’s possible the video game subject matter will keep this deal firmly on the entertainment side of the FTC and EU’s radar. While big tech has received scrutiny over the last several years, entertainment deals like Disney’s acquisition of Fox have been met with fewer antitrust concerns. One outstanding question is whether Microsoft’s new deal will be treated as a tech acquisition or an entertainment acquisition. While deals like this often aren’t obstructed, both the Federal Trade Commission and the EU have recently grown more hostile to the idea of big-tech acquisitions over fear that further consolidation could lead to harmful monopolies. Department of Justice, and likely the European Union. Security and Exchange Commission, the U.S. Mergers of this size have to be approved by regulatory bodies, most prominently the United States’ Federal Trade Commission, the U.S. And even when the $68.7 billion deal has been made official, Microsoft will still have plenty of complicated situations to sort out after the dust has settled.īetween Activision Blizzard facing ongoing litigation and accusations of a toxic workplace, the unrest at certain studios, a controversial CEO, and scrutiny from a few government regulatory groups, here are some of the problems that face Microsoft in its Activision Blizzard acquisition. Microsoft is acquiring Activision Blizzard, the companies announced on Tuesday, but the deal isn’t exactly done yet.
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