Microsoft and Activision’s merger will be reviewed by the Federal Trade Commission. The news comes after an announcement that Microsoft will be purchasing Activision for almost $70 billion. The FTC will be evaluating and reviewing the purchase that is being performed by two major corporations. The commission is tasked with protecting the economy from certain business developments. More specifically, the commission will look at purchases by businesses and do what is necessary to prevent monopolies from forming within the country.
By evaluating the purchase, the commission is hoping to determine the effects on consumers and rivals. The FTC will be partnering with the U.S. Justice Department to look at the purchase between the two companies. This decision to review the purchase comes after plans for new guidelines were announced by the FTC. The new guidelines will provide a much stricter policy that the FTC and Department of Justice will follow for companies that are merging.
In the past, The Wall Street Journal reported that the FTC has become concerned with major corporations such as Microsoft and Activision merging due to the potential for monopolies within the economy. In fact, the FTC has recently attempted to block two mergings. Both Lockheed Martin and Nvidia have been sued over the acquisition of competing companies in an attempt to block the purchases. As a result of these lawsuits by the FTC, both companies are much more likely to end the current deals that they have set in place. These monopolies have major effects on the economy due to the potential for higher prices and lower working wages.
A legal expert says that the deal will likely go through since there are no antitrust laws being broken by the companies. Although the eventual outcome is still unknown, it will be interesting to follow the process over the next few months.