The Federal Trade Commission on Thursday sued to block Microsoft’s $69 billion acquisition of the video game publisher Activision Blizzard, charging that the massive deal would allow the Washington tech giant to suppress its competitors in gaming, The Washington Post reported.
According to The Washington Post, the lawsuit represents the FTC’s most significant effort to rein in consolidation in the tech industry since prominent tech critic Lina Khan (D) became the commission’s chair and was expected to usher in an era of antitrust enforcement characterized by a willingness to bring cases in court rather than pursue settlements with companies.
The FTC lawsuit against Microsoft could foil the company’s ambitions to become a heavier hitter in gaming frontiers. Activision is the owner of popular titles such as Candy Crush and Call of Duty, and its acquisition could bolster Microsoft in its competition with Japanese console makers Nintendo and Sony.
The Washington Post also reported that the commission voted Thursday on a party-line vote to issue the lawsuit in administrative court, with the three Democrats in favor of the complaint and one Republican against it.
The Federal Trade Commission (FTC) posted the following:
The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises such as Call of Duty, alleging that the $69 billion deal, Microsoft’s largest ever and the largest ever in the gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.
In a complaint issue today, the FTC pointed to Microsoft’s record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda’s titles, including Starfield and Redial Microsoft exclusives despite assurances that it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles…
…Activision is one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices, including video game consoles, PCs, and mobile devices. It produces some the most iconic and popular video game titles, including Call of Duty, World of Warcraft, Diablo, and Overwatch, and has millions of monthly active users around the word, according to the FTC’s complaint. Activision currently has a strategy of offering its games on many devices regardless of producer.
The Wall Street Journal reported that Sony has been the loudest critic of the planned Activision deal, arguing that it could hurt competition if Microsoft restricts access to Activision games, especially Call of Duty, due to the franchise’s exceptional popularity.
According to The Wall Street Journal, Microsoft has said it doesn’t plan to deny Sony and others access to Activision games and that its deal for the company wouldn’t hurt competition. The company has publicly pledged to give Sony and Nintendo access to new Call of Duty games on their consoles for the next 10 years. Though Microsoft doesn’t disclose Xbox sales, it has said it would still be the third-largest video game console maker after Sony and Nintendo after merging with Activision.
What does this mean for gamers? It seems to me that the FTC’s decision to sue Microsoft over the Activision Blizzard acquisition means there could be a lengthy court battle. There is no way to know how a court will decide this case. Based on what I’ve seen on social media, there are a lot of gamers who hoped the acquisition would happen. The FTC’s decision to sue is disappointing.