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Monday, February 26, 2024

Xbox Faces Regulatory Hurdles as Activision Blizzard Merger Draws Mixed Responses

In a recent development, Xbox’s claim of securing support from regulators worldwide for its proposed acquisition of Activision Blizzard has been challenged by the Canadian Competition Bureau, which publicly expressed its opposition to the deal.

The Canadian Competition Bureau lawyer, Jonathan Bitran, penned a letter addressed to Microsoft lawyers Beth Wilkinson and Bambo Obaro, highlighting “factual inaccuracies” in a court document submitted during the evidentiary hearing between the Federal Trade Commission (FTC) and Microsoft. Bitran pointed out that the Bureau had conveyed its concerns regarding the merger’s potential negative impact on competition in the gaming console, multigame subscription services, and cloud gaming sectors during a video conference with Microsoft and Activision’s Canadian counsel on May 5, 2023.

Microsoft responded to the Canadian Competition Bureau’s statement, confirming that it had received notice that the Bureau would continue to monitor the acquisition even after the formal waiting period had expired. A Microsoft spokesperson stated, “We continue to work with regulators around the world to address any remaining concerns.”

The reference made by Bitran pertains to a memorandum submitted on June 16 before the hearing commenced. In this document, Microsoft had claimed that all worldwide regulators, excluding the FTC and the UK’s Competition Market’s Authority (CMA), supported the acquisition. However, the FTC is currently engaged in a lawsuit against Microsoft to halt the deal, while the CMA voted a few months ago to block the merger.

The Canadian Competition Bureau’s opposition dealt a blow to Xbox’s assertion that the FTC and the CMA were outliers in their resistance to the Activision Blizzard deal. Although Xbox has obtained approvals in markets such as Europe and Japan, it continues to face scrutiny in other regions.

Microsoft is presently appealing the CMA’s decision, with a hearing scheduled for July 28. The CMA had attempted to postpone the appeal hearing from July to October but was unsuccessful in doing so, as highlighted by The Verge’s Tom Warren.

Simultaneously, the evidentiary hearing between the FTC and Microsoft is underway, with its outcome holding the key to the future of Microsoft’s proposed acquisition of Activision Blizzard. To stay updated on the trial’s progress, readers can refer to daily roundups. For a more comprehensive analysis of the preceding trial days, detailed pieces on day one, day two, day three, and day four are available.

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