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FTC Vs. The Microsoft-Activision Deal, Explained | the deep dive

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Saying Microsoft’s (Nasdaq: MSFT) $68.7 billion acquisition of Activision Blizzard (Nasdaq: ATVI) is facing hurdles would be an understatement. At least two active lawsuits are trying to prevent the merger from happening, citing competition concerns.

First stop: the Federal Trade Commission (FTC) on Thursday filed an antitrust case against Microsoft, claiming the deal is an “illegal acquisition.” The commissioners, in a 3-1 vote, decided to pursue the agency’s administrative case after reports that the agency was investigating the deal. The case will be heard by the FTC’s own administrative law judge.

“With control of Activision’s content, Microsoft would have the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition,” the FTC complaint read.

The tech giant immediately responded to the complaint, reiterating the pledge it made that it won’t make Activision’s games exclusive to Microsoft’s Xbox, unlike some of its current titles under its belt.

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“[Microsoft’s] vision for the transaction is simple: Xbox wants to grow its presence in mobile gaming, and three quarters of Activision’s gamers and more than a third of its revenues come from mobile offerings,” the company said in its filed response. “Xbox also believes it is good business to make Activision’s limited portfolio of popular games more accessible to consumers, by putting them on more platforms and making them more affordable.”

Activision publishes both console and mobile games with Call of Duty, World of Warcraft, and Candy Crush being some of its most popular titles.

The FTC asserted in its complaint that Microsoft is “one of only two manufacturers of high-performance video game consoles” with Xbox. The gaming unit has its own “first-party” titles and video game subscription service Xbox Game Pass, both of which contributed to cultivating an exclusive gaming environment within its assets.

“Microsoft has acquired over ten third-party studios and their titles in recent years to expand its offerings. Microsoft has frequently made those acquired titles exclusive to its own consoles and/or subscription services, eliminating the opportunity for consumers to play those titles on rival products or services,” the commission explained.

On the other hand, Activision is said to be a creator and publisher of high-quality video games for video game consoles, personal computers, and mobile devices, with most of its titles referred to as “AAA” in the industry. Because of the creative talent, money, and time necessary for development, AAA games are expensive to make.

“Activision and industry participants recognize Call of Duty as Activision’s ‘key product franchise’,” the FTC said, adding that “from its launch in 2003 up through 2020, it generated $27 billion in revenues”–making it “one of the most successful console-game franchises ever.”

In response, Microsoft prefaced it by saying “this case involves a transaction between the third-place manufacturer of gaming consoles and one of many publishers of popular video games.”

“Xbox started behind Nintendo and Sony when it began making consoles 20 years ago, and it remains in third place today. Xbox also has next to no presence in mobile gaming, the fastest-growing segment of gaming and the place where 94% of gamers spend their time today,” Microsoft replied.

In essence, the firm explained that it is “good business” to offer Activision’s titles to a broader selection of gaming platforms, not by making it exclusive to one.

“A substantial portion of Activision’s financial value to Xbox comes from business as usual, including the continued sale of Call of Duty—its most popular game—on Sony’s PlayStation. Paying $68.7 billion for Activision makes no financial sense if that revenue stream goes away,” the firm further explained.

Microsoft also added that should it make Call of Duty exclusive, the “reputational hit to Xbox would not be worth any theoretical economic benefit from taking Call of Duty away from competitors.”

As it has maintained, the firm promised to keep Call of Duty on PlayStation “from the moment this deal was announced.” Xbox’s proposal to its competitor extends the offering for “ten years—an unheard-of length for contracts in the gaming industry.”

“Xbox has made this same offer to other competitors, and at least one (Nintendo) has accepted to date. Sony refuses to deal,” the firm said, highlighting that “the fact that Xbox’s dominant competitor has thus far refused to accept Xbox’s proposal does not justify blocking a transaction that will benefit consumers.”

“The acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry,” Microsoft summed.

In outlining its complaint, the FTC cited Microsoft’s past acquisition deal to buy ZeniMax Media in March 2021. ZeniMax Media is the parent company of game developer and publisher Bethesda Softworks.

The commission noted that while Microsoft pledged that it “would not have the incentive to withhold ZeniMax titles from rival consoles” during the antitrust review by the European Commission (EC), the firm still made three of the newly-acquired games exclusive to its platform–Starfield, Redfall, and Elder Scrolls VI.

“Although previous titles in ZeniMax’s [redacted] franchise were released on PlayStation, Microsoft has confirmed that the upcoming [redacted] will be available only on Xbox consoles, Windows PCs, and Xbox Game Pass subscription services,” the commission added.

The FTC also noted that Microsoft then announced “Starfield and Redfall, two of the highly anticipated new titles under development at the time of Microsoft’s acquisition of ZeniMax, will be Xbox platform and Xbox Game Pass exclusives when they are released.”

“Microsoft’s past behavior should also cast more suspicion on its non-binding public commitments to keep Call of Duty available on PlayStation consoles through the end of Activision’s existing agreement with Sony,” said the commission.

But for Microsoft, the ZeniMax transaction “has no relevance to the current transaction.” The firm further asserted that ZeniMax’s first two new titles were made exclusive to PlayStation for a year after the purchase completed.

In explaining why it made ZeniMax’s three future titles exclusive to Xbox and PCs, Microsoft explained that these were all “designed to be played primarily alone or in small groups.” However, it touted that it continued to release new updates of existing ZeniMax games such as Fallout 76 and Elder Scrolls Online on both Xbox and PlayStation, “because these games are designed to be played together by broad communities of gamers on different platforms,” adding that the latter set of games should be considered the ones that are more analogous to the Call of Duty game.

“Any suggestion that Microsoft’s statements to the European Commission about ZeniMax were misleading is incorrect. Microsoft explicitly said it would honor Sony’s existing exclusivity rights and approach exclusivity for future game titles on a case-by-case basis, which is exactly what it has done,” the firm reiterated.

The EC also agrees it was not misled, saying Microsoft did not make any “commitments” nor did the commission “rely on any statements made by Microsoft about the future distribution strategy concerning ZeniMax’s games” when it made the decision to approve the acquisition.

The FTC is suing the acquisition deal for the violation of Section 5 of the Federal Trade Commission Act and Section 7 of the Clayton Act, asking the court to prohibit “any transaction between Microsoft and Activision that combines their businesses.”

If the combination ensues, the FTC asked the court to order the merging firms to divest and reconstitute “all associated and necessary assets” in a way that they will function as two or more distinct and separate businesses. The commission also requests that the firms will not “acquire, merge with, consolidate, or combine their businesses with any other company engaged in business activity in the relevant markets” for a period of time following the acquisition.

For its part, Microsoft said that the commission “cannot provide clear proof that the combination of Microsoft’s gaming business and Activision’s business would restrain trade” in the relevant markets.

“The combination of Microsoft’s gaming business with Activision’s business will be procompetitive. The transaction will result in substantial acquisition-specific efficiencies, synergies, and other procompetitive effects that will directly benefit consumers,” the firm summed up.

Activision stated in its own response to the FTC’s lawsuit that “taking Call of Duty exclusive would be disastrous for Xbox.”

“If Xbox withheld Call of Duty from Sony’s PlayStation or other platforms that compete with Xbox, Xbox would immediately forgo billions of dollars in lost game sales and cleave off a massive portion of the garners that Activision has worked so hard to attract and retain,” the game publisher said.

The company added that it is “facially absurd and contradicted by the plain facts” for the FTC to assume “that a gaming platform cannot succeed without Call of Duty.”

Outside of the United States, Brazil approved the deal, while the United Kingdom is reviewing it.

The FTC suit follows a legal battle put forth by a group of video gamers, suing Microsoft to also stop the pending Activision acquisition for potential stifling of the competition.

The case was filed late Tuesday in a federal court in San Francisco on behalf of ten individual gamers who enjoy Activision Blizzard’s Call of Duty franchise as well as other popular titles like World of Warcraft, Overwatch, and Diablo.

According to the lawsuit, the proposed acquisition would give Microsoft “far-outsized market power in the video game industry,” with the capacity to “foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition.”

Several of the plaintiffs in the private antitrust complaint stated that they play Activision Blizzard games on Sony’s PlayStation, Microsoft’s primary rival. Others stated that they play them on their laptops, Xbox, or Nintendo’s Switch.

As it had previously stated, Microsoft responded to the suit, saying that the merger “will expand competition and create more opportunities for gamers and game developers as we seek to bring more games to more people.”

It was back in January 2022 that Microsoft announced the plan to acquire Activision at US$95 per share.

Microsoft last traded at US$238.73 while Activision last traded at US$75.95 on the Nasdaq.


Information for this briefing was found via BBC, CNBC, and the sources mentioned. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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Nothing Ear And Nothing Ear (a) Earbuds Are 1st With ChatGPT Integration – Forbes

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London-based Nothing Tech has just launched new earbuds, two pairs, in fact. The Nothing Ear and more affordable Nothing Ear (a) have just gone on sale—you can read Forbes contributor Mark Sparrow’s review of both pairs here. And now, the company has announced a cool new feature: and industry-first integration with ChatGPT. It comes with strings, though.

The new earbuds have just been announced and are available to pre-order from nothing.tech now and go on sale from Monday, April 22. If you’re in London, and you want to be among the very first to get the earbuds, you can snap them up in the Nothing Store Soho a little bit sooner, from Saturday, April 20 (click-and-collect is available).

From launch, the company said, “it will enhance its overall user experience with industry-first ChatGPT integrations in its audio and smartphone products.”

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Nothing goes on that it wants “to advance consumer tech products’ transition to AI, as well as simplify and enhance the user experience.”

It means users will be able to pinch the earbud to directly speak to ChatGPT to ask questions and hear responses in the earbuds. Nothing is also introducing new elements to Nothing phones, such as widgets which make it easy to talk to ChatGPT on the handsets. Other features include being able to send screenshots directly to ChatGPT and a clipboard shortcut for sending text.

So, what are the catches?

Although the Bluetooth new earbuds will work with any iPhone or Android phone, and there are dedicated Nothing apps for each platform, the ChatGPT integration is more limited for now.

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The earbuds must be paired with a Nothing handset. From today, the feature works with the premium model, the Nothing Phone (2), providing it’s running the latest software. The earlier Nothing Phone (1) and more recent, more affordable model, Nothing Phone (2a) will need to wait for a software update, which Nothing says is “coming soon”.

Also coming in the future is compatibility with earlier Nothing earbuds, that is the Ear (1), Ear (2) and Ear (Stick).

The new earbuds are very keenly priced. Ear costs $149 (£129 in the U.K.), while Ear (a) is $99 (£99 in the U.K.). Both pairs have active noise-cancelling, which is not commonplace at this price point. The more expensive Ear has a wireless charging case and a feature to create a personal sound profile. Both pairs come in black and white finishes, with Nothing’s trademark transparent design in the earbuds and charging case. But the Nothing Ear (a) has an eye-catching extra: a tremendous yellow-finish option.

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U of T Engineering PhD student is working to improve the sustainable treatment of Ontario's drinking water – U of T Engineering News – U of T Engineering News

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Growing up in a small neighbourhood in Cameroon, Maeva Che (CivMin PhD student) was aware of challenges of accessing clean drinking water. 

“Experiencing that exposure to water issues and challenges with sustainable access to safe drinking water ignited my interest in water treatment,” Che says.  

Che’s drive to improve water quality around the globe brought her to the Drinking Water Research Group (DWRG) at University of Toronto’s Faculty of Applied Science & Engineering, where she is researching innovative solutions to address local water issues.  

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Che is working under the supervision of Professor Ron Hofmann (CivMin), who is a member of the DWRG. Her research focuses on removing unpleasant taste and odour compounds in Ontario’s drinking water by promoting the biodegradation of these compounds through granular activated carbon (GAC) filtration. 

The project is supported by a five-year Natural Sciences and Engineering Research Council of Canada (NSERC) Alliance grant called Advanced and Emerging Issues in Drinking Water Treatment. 

GAC filtration is a water treatment process that uses granular activated carbon, which is made from organic materials that are high in carbon, such as wood, coal or coconut shells. These materials are heated in the absence of oxygen through a process known as pyrolysis and prompted chemically or physically to produce the activated carbon. The activation enhances the material’s adsorption properties, making it productive to remove contaminants from water.  

While GAC filtration is an effective treatment process, its adsorptive capacity is limited. The adsorptive capacity of GAC is expected to become exhausted after about three years in service and drinking water treatment utilities must replace the GAC. Aside from the inconvenience, replacing GAC is costly.  

Che is working on alternative ways to remove contaminants using GAC filtration, specifically through biodegradation. When the filtration has been in service for a while, there is the growth of micro-organisms on the GAC, which can be useful for removing contaminants.   

PhD student Maeva Che works with filtration systems research at the Drinking Water Lab in the Department of Civil & Mineral Engineering. (photo by Galina Nikitina)

“Think of biodegradation as the useful bacteria on the GAC feeding on the contaminants in the water, thereby removing them,” says Che. 

“If the GAC has enough good bacteria that is biodegrading the compounds, the GAC may not need to be replaced when its adsorptive capacity becomes exhausted. This can extend the filter’s lifetime, resulting in cost benefits for treatment utilities.” 

In other words, biodegradation can potentially enhance the performance of GAC filters. 

Che and the DWRG will collaborate with water treatment plants to determine methods that can enhance the biodegradation of taste and odour compounds within their GAC filters.  

Currently in its initial phase, the project is taking place alongside the Peterborough Utilities Group’s drinking water treatment plant, where Che is conducting pilot-scale filtration studies with support from the Peterborough Utilities Commission. They plan to extend this research to other partner treatment plants in the future. 

Working with various water treatment plants across Ontario, Che will also assess the effectiveness of GAC filters in removing non-traditional taste and odour compounds, which are not commonly monitored. 

To achieve this, she’ll evaluate filter performance for two common taste and odour compounds — 2-methylisoborneal and geosmin — and eight additional non-traditional compounds that can cause taste and odour events. This involves collecting GAC and water samples from the plants and conducting lab-scale filtration tests, called minicolumn tests. This test, developed by the DWRG, allows to differentiate between adsorption and biodegradation in GAC filters. 

Minicolumn tests provide crucial insights into the performance of the GAC filters in terms of the adsorption and biodegradation of contaminants. To distinguish between these mechanisms, researchers use parallel minicolumns. One minicolumn operates under conditions where the biological activity of micro-organisms is suppressed, which isolates the adsorption process. The second minicolumn operates without biological suppression, allowing both adsorption and biodegradation to occur. 

“Many plants are unaware of their filters’ performance for other compounds, aside from the two common ones, that also contribute to taste and odour events in water. Our project, therefore, plays a crucial role in expanding the understanding of this,” Che says. 

Project partners include the Ajax Water Supply Plant and the Barrie Surface Water Treatment Plant.  

The DWRG is made of approximately 30 graduate students, post-doctoral fellows, research managers and associates who collaborate with local, national and international industry and government organizations to address a wide range of projects related to municipal drinking water. 

Che credits her experience as a master’s student with the research group as a major factor in her decision to pursue a PhD at the University of Toronto.  

“During my master’s degree with the DWRG, I worked on projects that improved drinking water quality, gaining hands-on experience at treatment plants. Seeing the results of my research reinforced my decision to pursue my PhD here,” Che says. 

Ultimately, Che hopes to make a significant impact in the field — and the DWRG provides opportunities to achieve this, with a supportive community of researchers and supervisors.  

“My goal is to continue researching and developing sustainable solutions for drinking water treatment that benefit communities in need,” she says. 

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Huawei's latest flagship smartphone contains no world-shaking silicon surprises – The Register

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When Huawei debuted its Mate 60 smartphone in mid-2023, it turned heads around the world after teardown artists found it contained a system-on-chip manufactured by Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) using a 7nm process.

SMIC was thought not to be able to build that sort of thing. So while the Mate 60 didn’t differ markedly from every other modern smartphone, its very existence called into question the effectiveness of US-led efforts to prevent advanced chipmaking tech reach the Middle Kingdom.

Much speculation has therefore concerned what Huawei would deliver next, and this week the world got its answer – in the form of the Pura 70.

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Chinese media report that early users of the device have posted details of its innards, naming the SoC as Kirin 9010 with four efficient cores running at 1.55GHz, half a dozen performance cores at 2.18GHz, and a couple of high-performance cores zipping along at 2.30GHz. All cores are Arm v8. A third-party spec sheet suggests it’s a 7nm chip – meaning Chinese chipmakers appear not to have made another unexpected advance.

Early tests suggest it outperforms the Kirin 9000 found in the Mate 60, but independent assessments are yet to emerge. The crowdsourced evaluations currently available are sometimes dubious.

What we can say with confidence is that the Pura 70 has a 6.6-inch OLED display with 120Hz refresh rate and resolution of 2,760 x 1,256. It has 12GB RAM aboard, and buyers can choose from 256GB, 512GB, or 1TB of storage.

The three rear-facing cameras on the base models can capture 50, 12, and 13 megapixels apiece.

The Pura range derives from Huawei’s P-Series handsets that stretched from the midrange to the low-end of premium, but are now focussed – pardon the pun – on photography enthusiasts. The device comes on four variants, each priced to match the four editions of Apple’s iPhone 15.

The screen on the high-end “Ultra” model grows to 6.8 inches and 2,844 × 1,260 pixels, with two rear cameras that shoot at 50 megapixels and one at 40. One of the 50MP snappers is retractable, to enhance its zooming powers.

Importantly, all models of the Pura 70 run HarmonyOS 4.2 – Huawei’s not-Android operating system.

China is all-in on HarmonyOS as the nation pursues indigenous alternatives to Western tech. In recent weeks Chinese media and government agencies have noted the growing proliferation of native HarmonyOS apps, trumpeting that developer enthusiasm for the platform means local buyers now have a more patriotic alternative.

That alternative appears to be welcome: after the debut of the Mate 60, analyst firm IDC saw Huawei’s smartphone market share improve by 36.2 percent. ®

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