According to Reuters, Electronic Arts has reached an agreement with the Federal Trade Commission to delay its attempt to acquire Take-Two Interactive while FTC investigators address regulatory [i.e. – monopoly] issues.
What might the FTC be looking into? Newsweek’s N’Gai Croal covered this in great detail recently, including mention of my fears that consumers will suffer if EA is successful.
Cnet’s Daniel Terdiman wrote yesterday "that [EA is] losing its credibility with each new extension." Frankly, however, I can’t see Terdiman’s point. Credibility is a non-issue here. The dollars – and government regulatory clearance – will ultimately dictate whether this deal gets done.
Meanwhile, on his Anti-Tust Commentary blog, attorney Matthew Wild offers some legal insight into the EA’s strategy:
Under the agreement, EA must give the FTC 45 days’ notice of its intention to close. Parties often grant the Antitrust Division and FTC more time to review their transactions with the hope of convincing the agencies not to challenge the merger or to allow them to negotiate a remedy.
The most important take-away here is that EA is obviously worried that the FTC may have some concerns about the deal. As a game consumer, it’s reassuring to know that regulators are taking a good look at the proposed merger.
As I’ve pointed out before, EA’s track record with the Madden franchise demonstrates that the game publisher is willing to lower prices when faced with serious competition. The Madden case also shows that EA will take agressive steps to eliminate its competition and, if successful, will raise prices in a non-competitive landscape.