Microsoft’s Industry-Shaking Deal Triggers Legal Obstacles

Microsoft recently announced its plan to purchase gaming giant Activision Blizzard, the company behind franchises like Call of Duty and World of Warcraft. This $68.7 billion deal, the company’s largest acquisition ever, is likely to face significant regulatory and legal hurdles.

Microsoft will need to convince not only U.S. but also international antitrust regulators that the deal, which will turn Microsoft into the third-largest gaming company in the world by revenue, will not harm competition. Even though the vertical nature of the acquisition should dismiss any concern in that respect, regulators might scrutinize the purchase due to the recent focus on Big Tech’s market dominance. Microsoft, until now, has escaped this antitrust scrutiny, but this merger is too big to be ignored.

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The claims recently made public against Activision of a toxic work culture, sexual misconduct, and discrimination toward female staff add another layer of legal complexity. Microsoft has not clarified if it will assume those liabilities, but both companies should continue to operate independently until the transaction closes. As such, it is not a done deal yet, but it is almost certain that it will draw the attention of antitrust enforcers and regulators.