FTC doesn’t intend to let the Microsoft Activision Blizzard deal go

Microsoft concluded the Activision Blizzard deal in October, but the Federal Trade Commission (FTC) is appealing the district court’s decision that allowed Microsoft’s acquisition of Activision Blizzard to proceed. The FTC’s Ninth Circuit Court of Appeals hearing is set to commence on December 6, 2023. 

Previously, on September 13, seven venture capital firms initially filed a “friend of the court” brief supporting the Microsoft-Activision deal, emphasizing the vital role of mergers and acquisitions in the innovation and investment ecosystem. These seven firms opposed the U.S. Federal Trade Commission’s (FTC) appeal of the district court decision that cleared the deal, filing the brief before the Ninth Circuit Court of Appeals. 

Subsequently, an additional group of 30 venture capital firms and investors, managing assets exceeding $130 billion collectively, has conveyed their concern that the FTC’s continued opposition to the Microsoft-Activision deal jeopardizes the cycle of investment and entrepreneurship crucial for America’s innovation economy. Microsoft disclosed the development on its official website blog.

In their statement, the 30 venture capital firms fully endorse the positions articulated in the original “friend of the court” brief, arguing against the FTC’s proposed diluted legal standard that could grant extraordinary powers to block transactions.

The statement emphasizes the importance of exits through mergers and acquisitions, as they enable startups to recoup critical investment, fostering a cycle of risk and reward. The potential threat of the FTC’s altered legal standards is portrayed as a hindrance to investment in startups, potentially harming competition and impeding American innovation.

The 37 firms and investors are significant contributors to the U.S. innovation economy, spanning nationwide technology hubs. They urge the FTC to consider the unintended consequences of its legal arguments on innovation.

Among these firms, a dozen are founded or led by traditionally underrepresented investors, embodying the next generation of American innovation. They contribute to diverse industries critical to U.S. geopolitical and socioeconomic strength, such as health care, financial services, energy, transportation, defense, and technology.

The statement emphasizes the need for regulators to consider the far-reaching negative effects of their legal arguments on innovation and those facilitating it. A regulatory environment supportive of growth and job creation is highlighted as essential for investors and companies relying on the investment economy to nurture ideas and create innovative technologies.

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