For Microsoft (MSFT), the final hurdles in the U.S. regulatory process for the acquisition of videogame company Activision (ATVI) are swiftly being overcome. The FTC failed to obtain an emergency injunction from federal courts to block the merger, and now it seems that the agency may abandon its in-house legal proceedings.
According to a filing on the FTC website on Thursday, the case originally scheduled to be heard by the agency’s in-house judge in August has been suspended. This development paves the way for settlement discussions between Microsoft, Activision, and the FTC.
In premarket trading on Friday, Activision shares dipped 0.1% to $92.17, just below the acquisition price of $95 per share.
Although it is still possible for the FTC to pursue federal appeals or revive the in-house case at a later stage, at present there appears to be a clear path for the completion of the deal within the United States.
Microsoft’s Potential Concessions in the U.K.
The CMA’s concerns revolve around competition in cloud gaming, a technology that allows users to stream videogames across various devices. Currently, the U.K. ranks as the sixth-largest videogame market globally. Forcing Microsoft to sell or share its cloud-gaming rights in this lucrative market would not be excessively detrimental to the company. However, if cloud gaming emerges as the next paradigm in the videogame industry, this scenario could create a challenging precedent for future proposed deals. Particularly, if the U.K.’s cloud-gaming market proves to be more competitive than that of the United States, Microsoft’s victory may come at a price.
It remains to be seen how Microsoft will navigate these concerns and whether they will be able to address the CMA’s objections satisfactorily. As this situation unfolds, it will be crucial for both Microsoft and the CMA to find common ground and reach a mutually beneficial resolution.