Will Microsoft's acquisition of Activision Blizzard go through? Games lawyer thinks it's likely

pcgamer.com:

Microsoft's acquisition of Activision Blizzard is a very big deal. At a cost of $68.7 billion, Microsoft has added some of the biggest games in history to its roster, including Call of Duty, World of Warcraft, and Overwatch, along with a mountainous back catalog. The deal cost nine times as much as Microsoft's buyout of Bethesda, which was a blockbuster in its own right when it happened just over a year ago.

The Bethesda deal was announced in September 2020 but not actually completed until March 2021, and the Activision Blizzard is not expected to close until sometime in the company's 2023 fiscal year, after clearing the required regulatory hurdles. But with the acquisition set to make Microsoft the third-largest gaming company in the world by revenue, there is some concern that the buyout could face opposition from governing bodies over potential antitrust violations.

Antitrust regulations, monitored and enforced in the US by the Federal Trade Commission, are intended to promote competition and prevent monopolies. In 2020, for instance, the FTC filed antitrust actions against Facebook (citing its acquisition of Instagram, among other things), and more recently it took action to halt Nvidia's takeover of ARM. Microsoft itself faced an antitrust lawsuit filed by the FTC in 1998: It was initially ordered to break up, but that order was overturned on appeal and a lesser penalty was eventually negotiated.

The absorption of Activision Blizzard will unquestionably turn Microsoft into a game industry behemoth, but the general consensus right now is that it's unlikely to trigger antitrust action because it's a «vertical» transaction: A larger company purchasing a smaller one that performs an essentially different function.