Since my detailed analysis on Wednesday of documents released by the UK Competition & Markets Authority (CMA) related to the merger approval Microsoft and Activision Blizzard King, there have been some interesting rumors about what may happen next in the United States and the European Union:
Politico wrote that the staff of the United States Federal Trade Commission (FTC) is taking a position that makes a lawsuit by the agency against the transaction somewhat likely, though far from a given as it will be up to the commissioners to decide.
In the U.S., antitrust enforcers have to go to court, unlike in jurisdictions like the EU where they can hand down a decision that the other party may then appeal in a court of law. Merger cases are adjudicated relatively swiftly, and the FTC as well as the Antitrust Division of the DOJ have lost some of them, especially in recent history. The question is--in the simplest terms--whether the FTC will at some point get tired of losing, and whether it really wants to bring a case when only Apple (which is not known to be against this acquisition) could be a worse complainant in a gaming platform context than Sony (an enemy of cross-platform play) and Google--two companies that want ABK to remain independent only so they can enter into exclusive (and anticompetitive) deals with it.
Politico speculates that the FTC might decide to bring a case in its in-house court instead of federal court. That practice is controversial as the recent Supreme Court hearing in the Axon case showed. And it's absurd that the FTC has won every single case in front of its in-house judges over the last 25 years, but maybe this case would be an opportunity for the FTC's in-house judiciary to show some independence. I, personally, believe that if they wanted to sue, they should go straight to federal court, and I'm unconvinced (for more than one reason) of the argument that they shouldn't file in an Article III court because they (allegedly) couldn't seek a preliminary injunction while other jurisdictions haven't cleared the deal. It would look like an excuse to me, but that's my personal opinion and subject to the exact circumstances at the relevant time.
The Politico article says that Google is worried about Microsoft using ABK's games to make Chrome OS less competitive with Windows. I doubt very strongly that hardcore gamers are the primary target audience for Chrome OS. Google just wants to do another "Project Hug" type of deal with Activision Blizzard King--for Android, not Chrome OS.
The latest news just comes from Brussels, and was reported by Foo Yun Chee of Reuters. She has learned from "people familiar with the matter" that Microsoft "is likely to offer remedies to EU antitrust regulators in the coming weeks to stave off formal objections." A ten-year commitment to make ABK's titles available on Sony's PlayStation could apparently go a long way toward resolving any concerns and obviating a Statement of Objections (SO) that might otherwise come down in January.
Due to the specific circumstances of the proceedings on both sides of Atlantic I'd be more inclined to bet on the EU story than the U.S. one (to be fair, Politico's article makes it clear that the FTC may not sue in the end). When I saw the Commission announce an extension of the merger review deadline by ten working days, I already suspected that it had to do with a potential agreement. While I personally believe that this deal is a case for unconditional approval, a behavioral remedy--especially if merely consistent with what Microsoft has publicly said all along--may be the outcome. If the EU--whose competition chief Margrethe Vestager is world-famous for vigorously enforcing competition rules--cleared the transaction, an FTC lawsuit would be less likely to be brought in the first place or, in any event, be even more of an uphill battle.
As an app developer (previously two games, and now a productivity app) who brought his own complaints against Apple and Google, I'd like competition authorities to see the benefits to the digital economy at large from enabling Microsoft to compete with the mobile app store incumbents. I'm not worried about the PlayStation because the numbers make it clear it will remain the market-leading gaming console at any rate...
