-
Ever wanted an RSS feed of all your favorite gaming news sites? Go check out our new Gaming Headlines feed! Read more about it here.
-
We have made minor adjustments to how the search bar works on ResetEra. You can read about the changes here.
Yeah the gamers suit at this point is about money than decision.
This is definitely good news, the only thing remaining after that is the CAT appeal.
So, If I understand this correctly Microsoft's interest in closing over the CMA is due to Activision not wanting to renegotiate the deal come July (Or Acti terms being too much for MS)?
If that's the case, is it realistic for Microsoft to get this deal done within a month, with the FTC injunction?
If that's the case, is it realistic for Microsoft to get this deal done within a month, with the FTC injunction?
Last edited:
There is 0 solid information on what's happening in this respect. Everything is speculation. We know that the FTC is expected to file for a PI, and that Microsoft "welcomes" it.
It is good news for MS and ABK to go through. Good for competition and many others around the globe.
I think people are massively underestimating the FTC's chances on a preliminary injunction, which I view as roughly a coin toss of giving the FTC a result it likes.
Immediacy of harm in merger cases is usually pretty easy. The FTC just cites recent news articles indicating that Microsoft is looking for ways to close without CMA's approval, and prior Microsoft statements that Microsoft intends to close without FTC approval. Then it states that unwinding a merger is more difficult than stopping one, and that divestiture often fails to produce as good a competitor as existed pre-merger. That language shows up time and time again. Microsoft could almost certainly win the Preliminary Injunction case by agreeing that it won't close until X date or until Y thing occurs, but I'd put that result in the "result FTC likes" column.
The other big question is if the FTC case against the merger presents a genuine issue of material fact to be determined by the ALJ. If such an issue exists, the U.S. District court generally does not want to displace the ALJ as the initial fact-finder.
The result Microsoft is hoping for is: "There is no genuine issue of material fact, and Microsoft is entitled to close the merger as a matter of law." This, if not disturbed by appeal, would essentially render the FTC's internal trial pointless, because any successful block internally would be successfully appealed by Microsoft.
The FTC is hoping for the result: "A genuine issue of material fact exists to be resolved by the ALJ, and Microsoft's public comments create a real possibility that, without an injunction, they will close the deal, so we are granting the injunction." This way, if the ALJ rules for the FTC, then FTC is strengthened on further appeal because there was already found to have been a real factual issue for the ALJ to decide. That doesn't foreclose Microsoft winning, but it adds to FTC ammo.
That having been said here, I think Microsoft is playing chess and FTC is playing "tic tac toe my god is that a flying squirrel?" I don't think Microsoft plans to close over/around the CMA. I think they made noise about it and FTC took the bait. I think this gives Microsoft a real shot at the ruling they want, and if they get it, the CMA is left standing alone, and Microsoft's arguments to the CAT on irrationality, failure to adequately consider comity, etc. are strengthened.
If Microsoft gets its best ruling, it is helped more than the FTC is helped by its best ruling, so the rope-a-dope was a reasonable play.
Immediacy of harm in merger cases is usually pretty easy. The FTC just cites recent news articles indicating that Microsoft is looking for ways to close without CMA's approval, and prior Microsoft statements that Microsoft intends to close without FTC approval. Then it states that unwinding a merger is more difficult than stopping one, and that divestiture often fails to produce as good a competitor as existed pre-merger. That language shows up time and time again. Microsoft could almost certainly win the Preliminary Injunction case by agreeing that it won't close until X date or until Y thing occurs, but I'd put that result in the "result FTC likes" column.
The other big question is if the FTC case against the merger presents a genuine issue of material fact to be determined by the ALJ. If such an issue exists, the U.S. District court generally does not want to displace the ALJ as the initial fact-finder.
The result Microsoft is hoping for is: "There is no genuine issue of material fact, and Microsoft is entitled to close the merger as a matter of law." This, if not disturbed by appeal, would essentially render the FTC's internal trial pointless, because any successful block internally would be successfully appealed by Microsoft.
The FTC is hoping for the result: "A genuine issue of material fact exists to be resolved by the ALJ, and Microsoft's public comments create a real possibility that, without an injunction, they will close the deal, so we are granting the injunction." This way, if the ALJ rules for the FTC, then FTC is strengthened on further appeal because there was already found to have been a real factual issue for the ALJ to decide. That doesn't foreclose Microsoft winning, but it adds to FTC ammo.
That having been said here, I think Microsoft is playing chess and FTC is playing "tic tac toe my god is that a flying squirrel?" I don't think Microsoft plans to close over/around the CMA. I think they made noise about it and FTC took the bait. I think this gives Microsoft a real shot at the ruling they want, and if they get it, the CMA is left standing alone, and Microsoft's arguments to the CAT on irrationality, failure to adequately consider comity, etc. are strengthened.
If Microsoft gets its best ruling, it is helped more than the FTC is helped by its best ruling, so the rope-a-dope was a reasonable play.
Last edited:
I wonder if this might also play into how much the renegotiation/extension is likely to cost Microsoft. So this is the effort to say "Let's see if the FTC can make a solid case" If they can't then maybe they only extend 9 months. If they can, then that might mean another 18 months. Both of those impacting the potential share price offer and the termination cost.
I dont see how a PI could be given if the FTC is still committing to its ALJ timeline in january along with the fact that MS also has news articles in its favor stating how the FTC wants to essentially ignore their own ALJ's advice and wants rules changed to that extent.
The only way a PI will be give IMO the way the FTC wants is for them to expedite the ALJ.
Isn't that district where the gamer lawsuit is being heard?
yes, so there is a heightened risk of failing to get a TRO
familiarity with the case would be a bad thing, if they get same judge
should add that risk here is still low. expect TRO to be granted.
Phil Spencer wearing a Hexen t-shirt was the final straw.
I was reading this Verge article a couple of weeks ago, and in it I came across an interesting caveat which might explain the reasoning for the FTC's decision to go to the Federal Courts, as the FTC's website on the Activision/Microsoft merger still has a reference to a Evidentiary hearing that has been scheduled for August, 2nd 2023 at 10:00 AM before a Administrative Law Judge in FTC's Headquarters.
INAL, but if the FTC's reasoning on blocking the merger is weak; with a good chance of being dismised. It does make sense to have it thrown out in Federal Court, rather than in a preliminary hearing correct?
INAL, but if the FTC's reasoning on blocking the merger is weak; with a good chance of being dismised. It does make sense to have it thrown out in Federal Court, rather than in a preliminary hearing correct?
Last edited:
Thanks as always. Yea, learning that they're just blocking to give cover to the ALJ makes more sense. But it does seem the potential benefits are higher for MS. FTC took a gamble, we'll see how it pays off.
What does "genuine issue of material fact" entail one way or the other in this context?
You also have another new card to possibly play in that Microsoft has the green light to outright challenge the ALJ as unconstitutional and therefore the injunction is invalid. Not sure if they'll go this route unless it is granted (the injunction that is).
It's like Microsoft beat the campaign and decided to stick around for the end game.
Love to see it, get those paragon points
Love to see it, get those paragon points
FTC files preliminary injunction to block it
Confirmed
www.cnbc.com
FTC files to block Microsoft-Activision as deadline approaches
The FTC on Monday filed a temporary restraining order and preliminary injunction seeking to block Microsoft’s proposed acquisition of Activision Blizzard.
www.cnbc.com
Will the filing be posted to https://www.ftc.gov/legal-library/b...s/2210077-microsoftactivision-blizzard-matter eventually or is it already available somewhere else?
The filing asks the US District Court for the Northern District of California for a temporary restraining order that could keep the companies from consummating the acquisition while the FTC's in-house court is deliberating on the deal.
Northern District, it is. The same judge from the "gamers" lawsuit, probably.
OP
OP
This is just me speculating with the info that we have. So, I could be totally wrong.
I think that once the EC approved the acquisition (today just 4 weeks ago) and then China too, MS had 3 main issues to close the deal:
- CMA (the block)
- FTC (the administrative process)
- ABK (the outside date)
All of them are in some way interconnected. Therefore, fixing one could solve or help the other two.
The first one to address was the CMA. After all, it has been the stopper since September 2022 and the appeal process required to move fast. They got a shorter process than expected but it wasn't probably enough for them (it requires to extend the merger agreement no matter what). In parallel, MS tried to lobby the CMA and the UK government, but just the week before those meetings we got a leak suggesting that MS was exploring ways to close over UK (not a bad way to pressure them).
In any case, I don't think that those meetings were successful for MS. The CMA is very hard to pressure that way and we only got silence during the week (I think that in this case silence meant bad news because Brad Smith complaining again about the UK wouldn't have helped in any way).
However, maybe those meetings were in part successful because they created the impression that MS was serious about the possibility of closing without UK. Although I would love to see that happening from a legal perspective :p xD, I don't think that MS will pull the trigger. However, creating a reasonable doubt could be more than enough (for example, the statements from Satya Nadella about not closing the door to leave the UK).
What brings us to issue number 2: the FTC.
Once MS saw that the CMA issue couldn't be addressed fast enough, the alternative was accelerating the process with the FTC to corner the CMA. Specially now that they had created the impression that they could close over them.
The FTC didn't have any reason to file an injunction now. Unless they were forced to do so because they really believe that MS could close the acquisition over the CMA. Reading the transcript of the first CMC I thought that it was strange how many times MS insisted on the idea that they could close in the US whenever they wanted. In fact, when the CMA argued that the the hearing should be in autumn because they weren't the real obstacle (meaning that the FTC was), MS denied that by saying that they could close right now in the US if they wanted.
And I think that this is what's happening right now: MS is trying to force the hand of the FTC, hoping for a win that if it happens, could make the CMA really an outlier (supposing that everyone else approves it). They could make that happen really fast, because urgency is key right now. Specially if ABK (the third issue) is not going to be in the mood for much longer in this whole thing.
Then, if MS succeeds against the FTC, the CMA could be the only one opposing the acquisition. In that case, arguments about irrationality or comity get reinforced. Maybe so much that the CMA would prefer to settle before a loss that could be costly.
Accelerating the FTC issue now to corner the CMA could also solve the ABK issue about timing, because if MS is lucky enough they could close before the original outside date or just extend the merger agreement for short period of time (1 to 3 months) without any drastic changes.
It's a risky move, but it could work.
As I say, this is just my speculation and could be totally wrong. But I think that it's one way to read what has been happening during the last 3-4 weeks.
Great post. I also think that the FTC is being underestimated.
Last edited:
It's impossible to underestimate the FTC. Especially as it is currently constituted.
Interesting. By Private challenge, does he mean the gamer lawsuit? So chances are that they get the same judge?
This is all going a lot faster than I thought. Next years MS showcase is gonna be like 4 hours long.
How do they close the deal without CMA? I thought that was the whole point that they needed the CMA unless they do something like move the company out of the UK and sell via distributors
Thank you for the detailed thoughts! So kind of like an implicit pressure with ABK, to try to bring certain variables to a head, if not take them off the table. I guess this would also help shape extension negotiations even if they don't actually intend to close immediately, as I imagine uncertainty around certain things could strengthen ABK's hand in negotiations. So it may be worth it now for MS to smoke out the FTC and try to clear up some of this uncertainty.
