What the Microsoft-Activision ruling means for deal-making

What the Microsoft-Activision ruling means for deal-making

A federal judge’s decision to let Microsoft close its $70 billion acquisition of video game maker Activision Blizzard didn’t just represent a victory for the tech giant. It also comes as a blow to the FTC, which sought to block the transaction.

That leaves Leena Khan, the agency’s chief and a proponent of more comprehensive antitrust regulation, facing a difficult question: Is her strategy of aggressively fighting mergers backfired and actually encouraging more dealmaking?

Microsoft is close to securing the deal. In her 53-page ruling, Judge Jacqueline Scott Corley wrote that the FTC had failed to show that Microsoft’s purchase of Call of Duty’s maker would substantially reduce competition in the video game market.

Another good news for Microsoft is that Britain’s Competition and Markets Authority — the last remaining regulator opposed to the transaction — said Tuesday it is now ready to hear the company’s settlement proposals. That means the Activision deal, its biggest tech acquisition ever, could close as soon as next week. (The transaction deadline is July 18.)

Tuesday’s decision was Ms. Khan’s latest blow to the FTC, That left a fight against the virtual reality start-up’s purchase by Meta earlier this year. And last time, the FTC was defeated on what it considered friendly grounds: a judge in its own administrative court. Regulator’s argument rejected That the $7 billion acquisition of cancer-detection specialist Grail by gene-sequencing company Illumina was illegal.

Ms. Khan is unlikely to change course, at least for now. FTC may appeal Judge Corley’s ruling as soon as wednesday, Its argument may revolve around University of Baltimore School of Law professor Robert Lande, who told DealBook about the judge’s reliance on an erroneous legal standard likely to reduce competition.

And NYU School of Law professor Eleanor Fox told The Times that Ms Khan’s more detailed approach was more in line with regulators in Europe and Britain. (That said, EU officials approved the Activision deal in May.)

But skeptics say the FTC is in a weak position. A corporate consultant told DealBook that the agency was at a loss. Strengthening Limitations of existing antitrust jurisprudence. Anu Bradford of Columbia Law School told DealBook, “Khan is trying to do very ambitious things against a very strong ideology.” “This decision shows that the courts may not have been prepared.”

The morale of dealmakers is increasing. Executives and consultants told DealBook that companies are willing to roll the dice when it comes to ambitious deals. (Of course, he cautioned, it all depends on the circumstances of each situation.)

Many still see the FTC suing to block large trading, but believe the agency’s repeated losses mean they have a better chance of winning in court.

Bank of America has been fined $150 million. Federal regulators accused the lending giant of withholding promised benefits to credit card customers, doubling overdraft fees and opening card accounts in customers’ names without their knowledge or consent. The fine reflects in part an effort by the Biden administration to punish companies for “junk fees” that they say harm consumers.

Senators will investigate the possibility of more bank mergers. Senate Banking Committee will hearing on wednesday In light of the chaos created by the collapse of Silicon Valley Bank this spring, at issue. Treasury Secretary Janet Yellen has suggested that more mergers could strengthen the banking system; Senator Elizabeth Warren, the Democratic chair of the committee, is skeptical of this argument.

Another major insurance company pulled out of Florida. Farmers said it would happen stop providing coverage in the stateNearly 100,000 policies were terminated, citing the need to “manage risk exposure”. It is the fourth insurance provider to reduce its business in Florida as the state grapples with more natural disasters amid climate change.

Tesla is reportedly investigating a company-funded home for Elon Musk. The proposal known internally as “Project 42” calls for a wide glass walled structure Near the Texas headquarters of the electric car maker, according to The Wall Street Journal. Board members investigated the plan to see whether company money had been misused, though the Journal said the project and the outcome of the investigation could not be determined.

The PGA Tour came under fire at a Senate hearing on Tuesday over a proposed deal involving Saudi Arabia-backed rival LIV Golf. The deal could see the state invest more than $1 billion in sports, but lawmakers have criticized the deal and the Justice Department is expected to investigate it.

Here are highlights of the hearing and documents released by the Senate:

It was announced even before the deal was completed. “The rollout was very confusing and wrong, which is everybody’s fault,” said Jimmy Dunn, the investment banker and PGA Tour director who helped organize it. He said that no merger has been agreed upon.

According to the documents, Michael Klein, a veteran dealmaker and adviser to Saudi Arabia, pressured both sides to release the information. “The announcement is so huge that it is not possible to wait till the final decision. If we don’t put the message out others will fill it in,” he wrote in an email to the parties involved. “The worst thing we can do is let the detractors lead the chorus.”

The PGA Tour felt it had no choice. Mr. Dunn and the Tour’s chief operating officer, Ron Price, said at the hearing that the billions behind LIV made it impossible for the PGA Tour to fight on indefinitely. The Money Fund wanted to “destroy the tour”, Mr Dunn said, and it is backed by “unlimited horizons and an unlimited amount of money”.

Dealmakers defend keeping the board and players in the dark. “We were really afraid that once the other side’s lawyers found out anything about it, it would be worthless,” said Mr. Dunn, who was among the lead negotiators along with Ed Herlihy, a partner at Wachtel and a fellow director. was one of

A list of people and sponsors was given for PGA Tour officials to call the day the deal was announced. At the top of the order for Tour Commissioner Jay Monahan: Rory McIlroy, a director and one of LIV Golf’s most outspoken critics, and Tiger Woods. One proposal brought up the idea of ​​two players owning LIV teams.

Special membership was proposed for a top Saudi official. The Saudi Wealth Fund raised the idea that its governor, Yasir al-Rumayyan, could receive membership of the Augusta National Golf Club and the Royal and Ancient Golf Club of St Andrews as part of the deal. Neither of these clubs is controlled by the PGA Tour, but both Mr. Dunn and Mr. Herlihy are members of Augusta.

Main Question: Govt. Mister. Dunn reiterated that the PGA Tour would still be in charge, despite the Saudi money. He added, “What I can tell you is that the management of the game will continue.” “The tour will appoint a majority of the board of directors.”

, An unnamed studio executive told Deadline The week-long strike by the Hollywood Writers Union is planning to continue into the autumn, causing economic hardship. Actors may also join the sit-in demonstration along with the writers as the midnight deadline approaches.

Chatbots and generative artificial intelligence have captured the public’s imagination, the technology’s biggest proponents say it just might add trillions of economic value in the next decade. It is also giving rise to lawsuits that create new troubling issues for the courts and companies.

On Tuesday, Google was sued in a hypothetical class action in California federal court alleging the company violated privacy laws and “trained its chatbots without Internet users’ consent by scraping their online data.” was accused of “constant theft”. Google case, and a parallel case was filed last month Against Microsoft and OpenAIThe creator of ChatGPT is demanding that tech companies compensate Internet users for this data appropriation.

These cases represent “an evolution of people’s understanding of the value of data”. said Tracey Cowan, Clarkson’s partner who filed the lawsuit. People are increasingly realizing that their internet footprint – views posts and likes – holds economic significance for tech companies. In the social media economy, an industry of data brokers emerged to buy and sell such data. In the AI ​​era, the same data is being used to train new generative AI tools.

For this reason and others, tech executives themselves, including OpenAI CEO Sam Altman, have in recent months called on lawmakers to regulate AI.

suits go a step furtherThe public cry to temporarily halt the commercialization of AI until guidelines are developed has grown even louder. “We’re all just guinea pigs in our experiment,” said Ryan Clarkson, a partner at the firm. Meanwhile, the suit calls for allowing users to opt out, so they can better control how tech companies use their data.

,We’ve been clear for years that we use data from public sources – Like information published on the open web and public datasets – To train the AI ​​models behind services like Google Translate to respond responsibly and to us AI theory,” said Halimah Delen Prado, Google’s general counsel. “US law supports the use of public information to create new beneficial uses, and we look forward to refuting these baseless claims.” Microsoft declined to comment; OpenAI did not provide any response.

Comedian Sarah Silverman has also joined the AI ​​litigation, Signing separate lawsuits against OpenAI and Meta for copyright infringement. She is the latest big-name creator to demand that AI companies seeking to use her intellectual property license it first.


  • TikTok’s parent company ByteDance is reportedly hiring US workers cash out their shares in the Chinese tech giant ahead of any IPO (Reuters)

  • Nvidia is said to be in talks To become a cornerstone investor in British chip designer Arm’s upcoming IPO. (ft)

  • Tech mogul Sam Altman has a plan merge oklo, a nuclear energy start-up he has backed, with a blank-check vehicle he took the company public. (WSJ)

  • Disney is reportedly weighing Sale of your Star India businessAmid mounting losses in the division after losing the streaming rights for Indian Premier League cricket matches. (WSJ)


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