No 'substantive' settlement talks between U.S. FTC, Microsoft over Activision -lawyer

Microsoft logo is seen on a smartphone placed on displayed Activision Blizzard's games characters in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration

WASHINGTON, Jan 3 (Reuters) - There are no "substantive" settlement discussions under way between the Biden administration and Microsoft Corp (MSFT.O) to resolve a legal dispute over the Xbox maker's $69 billion bid for games maker Activision Blizzard Inc (ATVI.O), a Federal Trade Commission attorney said on Tuesday.

The FTC, which enforces antitrust law, asked a judge to block the transaction in early December, arguing it would give Microsoft's Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony Group Corp's (6758.T) PlayStation out in the cold.

FTC attorney James Weingarten, speaking in a brief telephonic pretrial hearing, said there were no "substantive" settlement discussions between the two sides under way.

Microsoft argues that the deal would benefit gamers and gaming companies alike, offering to sign a legally binding consent decree with the FTC to provide "Call of Duty" games to rivals including Sony for a decade.

The case reflects the muscular approach to antitrust enforcement being taken by the administration of U.S. President Joe Biden. But antitrust experts say the FTC faces an uphill battle to convince a judge to block the deal, because of the voluntary concessions offered by Microsoft to allay fears it could dominate the gaming market.

Michael Chappell, the FTC administrative law judge, will rule on the deal after hearings set for August 2023. Either side can then appeal to the same FTC commissioners who voted to bring the challenge, and then to a U.S. appeals court.

The deal faces scrutiny in the European Union which is to decide by March 23 whether to clear or block the deal.

Reporting by Diane Bartz in Washington Editing by Matthew Lewis

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