In a significant legal battle, Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick are set to testify as witnesses in a five-day evidentiary hearing initiated by the Federal Trade Commission (FTC). The hearing, scheduled to commence this week, aims to address the FTC’s attempts to block Microsoft’s proposed acquisition of Activision Blizzard, a deal valued at $69 billion.
The FTC’s Legal Bid
The FTC is seeking a preliminary injunction to prevent Microsoft from completing the acquisition. If granted, this injunction would effectively terminate the deal, which currently carries a termination date of July 18. Additionally, Microsoft would incur a substantial $3 billion termination fee.
Exclusive Access Concerns
The FTC argues that the acquisition would grant Microsoft’s Xbox video game console exclusive access to Activision games, potentially marginalizing other major players in the gaming industry, such as Nintendo and Sony Group Corp’s PlayStation.
European Approval and British Obstruction
While the European Union approved Microsoft’s bid in May, British competition authorities blocked the takeover in April, adding complexity to the legal proceedings.
Testimony Overview
Satya Nadella, CEO of Microsoft, will provide testimony regarding various aspects of the video game industry, Microsoft Gaming’s strategy and business, and the proposed acquisition of Activision. Similarly, Bobby Kotick, CEO of Activision, will testify about Activision’s gaming business, future plans, and strategies.
Additional Witnesses
The list of witnesses also includes James Ryan, CEO of Sony Interactive Entertainment, and Dov Zimring, former director of product management for Stadia, the now-closed gaming service under Alphabet’s Google LLC. Furthermore, two executives from Nvidia Corp. are scheduled to testify.
Microsoft Executives on the Stand
Microsoft’s Chief Financial Officer, Amy Hood, along with Microsoft Gaming CEO Phil Spencer and Microsoft Gaming CFO Tim Stuart, are among the scheduled witnesses who will offer their insights during the hearing. Several expert witnesses will also contribute their expertise to the proceedings.
FAQs (Frequently Asked Questions)
- Q: Why does the FTC want to block Microsoft’s acquisition of Activision Blizzard? A: The FTC believes that the acquisition would grant Microsoft’s Xbox console exclusive access to Activision games, potentially harming competition in the industry.
- Q: Has the European Union approved the Microsoft-Activision merger? A: Yes, the European Union approved the merger in May.
- Q: Why did British competition authorities block the takeover? A: British competition authorities obstructed the takeover in April, citing concerns related to competition in the gaming industry.
- Q: What topics will Satya Nadella address in his testimony? A: Satya Nadella will discuss the video game industry, Microsoft Gaming’s strategy and business, and the proposed acquisition of Activision.
- Q: What will Bobby Kotick testify about? A: Bobby Kotick will provide insights into Activision’s gaming business, future plans, and strategies.
- Q: Are there any other witnesses scheduled to testify? A: Yes, witnesses include James Ryan, CEO of Sony Interactive Entertainment, and Dov Zimring, former director of product management for Google’s now-closed gaming service, Stadia.
Conclusion
As the FTC’s hearing unfolds, industry leaders such as Microsoft CEO Satya Nadella and Activision Blizzard CEO Bobby Kotick will shed light on crucial aspects of the proposed merger. Their testimonies, along with those of other witnesses, will shape the outcome of this legal battle, which has far-reaching implications for the gaming industry. Stay tuned for updates as the proceedings progress.