In a year that has been rife with acquisitions and mergers, the biggest one of them happened in January. Microsoft Acquired Activision Blizzard in a record-breaking $69 billion deal, but the union still isn’t complete due to the FTC blocking it. But now, the four-member panel standing in the way of the merger is going through a rift, which may lead to approval being the result.
Lina Khan, who is the head of the panel, has been the primary catalyst in blocking the merger. However, with the divide in opinion now emerging in the FTC panel, she may have to give up.
- The Microsoft-Activision Blizzard merger can finally get approval from FTC due to a rift in the four-person committee.
- Democrat Rebecca Slaughter is siding with Microsoft according to sources, bringing the panel to a tie.
- FTC head Lina Khan may approve the merger to keep her authority and in light of Microsoft offering compensation.
The New York Post first reported this new development in the deal through their sources. According to them, there are three Democrats and one Republican on the FTC panel. Christine Wilson, the Republican, was already on the side of the merger but now one of the Democrats has also changed their view.
One of Rebecca Slaughter and Alvaro Bedoya, which make up the three Democrats with Khan, is now siding with Microsoft. No one knows the identity of the opposing Democrat, but sources point to Slaughter. This is a big turn for the deal as a 2-2 divide in the vote, makes Khan’s plans to block the deal improbable.
According to the New York Post, Khan was looking to sue to block the Microsoft-Activision Blizzard deal. She has been against the merger since June when she criticized the deal for its impact on workers. However, a tie in the vote would not only tear down her plans but also approve the merger.
Another factor that comes into play is Lina Khan’s authority over the FTC. If a vote does end in a tie, it will bring up questions about her role as the head of the FTC, which she doesn’t want. That is why she may look to approve the merger to avoid any problems according to former chairman William Kovacic:
Lina would probably not put things in a position for that to take place, so instead of having that vote she would make the motion to approve the settlement.”
Interestingly, the majority leader of the Senate, Chuck Schumer, went to meet Microsoft president Brad Smith to discuss the merger. Rebecca Slaughter, the reported Democrat on Microsoft’s side now was Schumer’s chief counsel for 4 years before leaving for the FTC. Kovacic thinks Slaughter might have gotten a call from her old boss:
This is when Schumer calls his old protege and says, ‘What’s up?”
In another turn of events, Reuters reported last week that Microsoft would offer a 10-year licensing deal for Call of Duty to Sony. FTC’s major weapon to block the deal has been Microsoft’s reluctance to offer concessions to rivals. But, if Microsoft offers this deal, it essentially leaves no basis for FTC to block the deal.
William Kovacic has said the likelihood of the merger happening is at 70% after recent events. The chances will be especially high if Microsoft provides compensation as the deal would be too good to disapprove. Joe Biden could step in and push Khan to approve the merger if this happens, according to the New York Post.
Microsoft has said that it will work with the FTC to close the deal. In addition to this, a spokesperson said that the company will still trail Sony and Tencent in the market. His comments in full are below:
We are prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence. We’ll still trail Sony and Tencent in the market after the deal closes, and together Activision and Xbox will benefit gamers and developers.”
A recommendation on the Microsoft-Activision Blizzard merger will come in mid-December from the FTC staff. A final vote from the commission may take place at the end of this month. Hopefully, everything comes to an amicable end for all parties, and benefits gamers.
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