8 ms·

Can somebody please explain to me, why is it allowed for a company like MS to buy all of their (indirect) competitors?

draw_down 5y ago
ChuckNorris89 5y ago
Why wouldn't they be allowed to? Companies acquire smaller companies and competitors all the time, it's called consolidation. One party want to sell, the other wants to buy. As long as the deal doesn't breach any anti-trust laws, it's good to go.
- sofixa 5y ago
  If this type of deal ( vertical consolidation through acquisition of competitors, and then removing those former competitors' content from competing platforms) isn't illegal, antitrust laws need to be adapted so it becomes so. It's impossible to deny it's purely in detriment to the market, competitors, and consumers.
  - panick21_ 5y ago
    Anti-Trust is quite openly defined. The courts in the 70s tried to establish a consistent way to judge it. The basically defined it as consumer can be forced to pay higher prices. You can read about Judge Richard Posner. Either there would need to be some revolution with the legal profession, or congress would have to pass some new law. What the judges realized is that by an more open definition pretty much any company and any merger could be said to be against anti-trust. So if you want such a law, you need to actually get some exact definition of how every is judged that can be consistently legally applied.
koheripbal 5y ago
In our legal system, actions are legal unless there is a law making them illegal. If you are referring to anti-trust laws preventing this, then MS would need to be buying a huge number of companies to monopolize the gaming market, not just Activision, in order to be in violation of this law.
- echelon 5y ago
  But they span ten or so different industries with a $2T market cap, and it's full of unhealthy monopolistic synergies. They can wield this power to force deals and push out competitors across their multiple business units. They can "ask" gaming companies to use Azure if they want to run on Windows or Xbox. They can ignore Mac and PlayStation as platforms. They can bundle software licenses, payment gateways, and design hardware that only works in one ecosystem. This is the modern monopoly. Good luck competing with it or avoiding their platform fees as you try to grow your revenue. You'll undoubtably wind up feeding your direct competition somehow or another.
  - panick21_ 5y ago
    Monopolistic synergies are not a legal reason for anything. This is what people imagine the law is, but it isn't. > They can wield this power to force deals and push out competitors across their multiple business units. The only way this would matter is if you can prove that they have some monopoly in any one market and use that monopoly position to drive up prices. So if somehow could leverage their Windows OS as to sell games for 1000$ rather then 100$. Microsoft does not have monopoly in any one market as far as I can tell.
  - sovnade 5y ago
    Yeah this is bad for everyone overall. Disney is an even worse offender if you're looking at synergistic monopolies.
jackling 5y ago
I guess since there are so many competitors in the gaming market, the US government doesn't care. Not like this acquisition with make Microsoft have a majority share in the entire gaming industry.
sbarre 5y ago
Even after this purchase, Microsoft's gaming division is still smaller than Sony by revenue.. There are still lots of other large publishers out there.. EA, Take Two, Embracer, Tencent, Epic, etc... I'm sure I'm forgetting some big obvious ones even. They are definitely not "buying all their competitors" as you put it.
- Kelteseth 5y ago
  Valve/Steam would be the biggest competitor on desktop, with nearly 30 million active users.
- syshum 5y ago
  >>Tencent, Epic, You said Tencent twice ;)
  - ohgodplsno 5y ago
    Tim Sweeney maintains more than 50% ownership of Epic.
- dmonitor 5y ago
  Smaller than Sony or smaller than Playstation? Sony does a lot more than just vidya
  - sbarre 5y ago
    I'll let you do your own research.
    - dmonitor 5y ago
      Fair enough. Looks like it was Sony Interactive Entertainment
- ecf 5y ago
  > Microsoft’s gaming division Isn’t that the point? Why can something as large as MS have a “division” that can go into mergers and acquisitions as if they were a separate entity? > There are stills lots of other large publishers …goes on to name 5. > They are definitely not “buying all their competit Sure, you can be as pedantic as you want and jump through hoops to come to that rationalization.
micromacrofoot 5y ago
this will only make them the third largest gaming company
JohnWhigham 5y ago
Because the federal government doesn't stop them, quite plainly. They fear it would stifle innovation and competition. It's the same reason why egregious white collar crimes rarely get punishments. I wish I was making this up.
phasersout 5y ago
This deal has to be approved by a lot of regulators before it will go through. AB is a global company. MS thinks it will take at least 12 to 18 month before the deal will happen. Or not, since regulators are a bit iffy with big-tech these days. But overall even though it's a big acquisition both together will still remain one amongst a few big gaming companies.

Why wouldn't they be allowed to? Companies acquire smaller companies and competitors all the time, it's called consolidation. One party want to sell, the other wants to buy. As long as the deal doesn't breach any anti-trust laws, it's good to go.

sofixa 5y ago
If this type of deal ( vertical consolidation through acquisition of competitors, and then removing those former competitors' content from competing platforms) isn't illegal, antitrust laws need to be adapted so it becomes so. It's impossible to deny it's purely in detriment to the market, competitors, and consumers.
- panick21_ 5y ago
  Anti-Trust is quite openly defined. The courts in the 70s tried to establish a consistent way to judge it. The basically defined it as consumer can be forced to pay higher prices. You can read about Judge Richard Posner. Either there would need to be some revolution with the legal profession, or congress would have to pass some new law. What the judges realized is that by an more open definition pretty much any company and any merger could be said to be against anti-trust. So if you want such a law, you need to actually get some exact definition of how every is judged that can be consistently legally applied.

koheripbal 5y ago

In our legal system, actions are legal unless there is a law making them illegal. If you are referring to anti-trust laws preventing this, then MS would need to be buying a huge number of companies to monopolize the gaming market, not just Activision, in order to be in violation of this law.

echelon 5y ago
But they span ten or so different industries with a $2T market cap, and it's full of unhealthy monopolistic synergies. They can wield this power to force deals and push out competitors across their multiple business units. They can "ask" gaming companies to use Azure if they want to run on Windows or Xbox. They can ignore Mac and PlayStation as platforms. They can bundle software licenses, payment gateways, and design hardware that only works in one ecosystem. This is the modern monopoly. Good luck competing with it or avoiding their platform fees as you try to grow your revenue. You'll undoubtably wind up feeding your direct competition somehow or another.
- panick21_ 5y ago
  Monopolistic synergies are not a legal reason for anything. This is what people imagine the law is, but it isn't. > They can wield this power to force deals and push out competitors across their multiple business units. The only way this would matter is if you can prove that they have some monopoly in any one market and use that monopoly position to drive up prices. So if somehow could leverage their Windows OS as to sell games for 1000$ rather then 100$. Microsoft does not have monopoly in any one market as far as I can tell.
- sovnade 5y ago
  Yeah this is bad for everyone overall. Disney is an even worse offender if you're looking at synergistic monopolies.

jackling 5y ago

I guess since there are so many competitors in the gaming market, the US government doesn't care. Not like this acquisition with make Microsoft have a majority share in the entire gaming industry.

sbarre 5y ago

Even after this purchase, Microsoft's gaming division is still smaller than Sony by revenue.. There are still lots of other large publishers out there.. EA, Take Two, Embracer, Tencent, Epic, etc... I'm sure I'm forgetting some big obvious ones even. They are definitely not "buying all their competitors" as you put it.

Kelteseth 5y ago
Valve/Steam would be the biggest competitor on desktop, with nearly 30 million active users.
syshum 5y ago
>>Tencent, Epic, You said Tencent twice ;)
- ohgodplsno 5y ago
  Tim Sweeney maintains more than 50% ownership of Epic.
dmonitor 5y ago
Smaller than Sony or smaller than Playstation? Sony does a lot more than just vidya
- sbarre 5y ago
  I'll let you do your own research.
  - dmonitor 5y ago
    Fair enough. Looks like it was Sony Interactive Entertainment
ecf 5y ago
> Microsoft’s gaming division Isn’t that the point? Why can something as large as MS have a “division” that can go into mergers and acquisitions as if they were a separate entity? > There are stills lots of other large publishers …goes on to name 5. > They are definitely not “buying all their competit Sure, you can be as pedantic as you want and jump through hoops to come to that rationalization.

micromacrofoot 5y ago

this will only make them the third largest gaming company

JohnWhigham 5y ago

Because the federal government doesn't stop them, quite plainly. They fear it would stifle innovation and competition. It's the same reason why egregious white collar crimes rarely get punishments. I wish I was making this up.

phasersout 5y ago

This deal has to be approved by a lot of regulators before it will go through. AB is a global company. MS thinks it will take at least 12 to 18 month before the deal will happen. Or not, since regulators are a bit iffy with big-tech these days. But overall even though it's a big acquisition both together will still remain one amongst a few big gaming companies.