FTC sues to block Microsoft’s $69 billion acquisition of Activision Blizzard

UPDATE 8 p.m.: Microsoft has responded to the FTC’s announcement of a lawsuit to block its $69 billion acquisition of Activision Blizzard.

“We continue to believe that this agreement will expand competition and create more opportunities for gamers and game developers,” Microsoft Vice President and President Brad Smith said in a statement. “We have been committed from day one to resolving competition issues, including offering proposed concessions to the FTC earlier this week.”

“While we believe in giving peace a chance,” Smith concluded, “we have complete confidence in our case and welcome the opportunity to present our case in court.”

ORIGINAL STORY 7:30 p.m.: The US government’s Federal Trade Commission is suing to block Microsoft’s $69 billion acquisition of Activision Blizzard, saying the deal would allow the company to cut out its competition in the games industry.

In a press release announcing the lawsuit, the FTC highlighted Microsoft’s 2021 acquisition of ZeniMax and the company’s subsequent decision to make games from its subsidiaries – namely Starfield and Bethesda’s Redfall – exclusive to Microsoft devices, although it has previously assured European regulators that it has no incentive to withhold games from rival consoles.

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” FTC Competition Bureau Director Holly Vedova said in a statement. “Today, we seek to prevent Microsoft from taking control of a leading independent game studio and using it to harm competition in several dynamic and fast-growing game markets.”

The FTC goes on to say that Activision Blizzard is “one of the very few video game developers in the world that creates and publishes high-quality video games for multiple devices,” before noting the publisher’s titles – which include the likes of Call of Duty, Overwatch and World of Warcraft – currently attract 154 million monthly active users between them.

“But that could change if the deal is cleared,” the FTC statement continued. “With control of Activision’s successful franchises, Microsoft would have both the means and the motive to harm competition by manipulating Activision’s pricing, degrading the quality of Activision’s games or the player experience. on competing game consoles and services, changing the terms and timing of access to Activision content, or withholding competitors’ content entirely, causing harm to consumers.”

A Washington Post report expands on the FTC’s arguments, saying its lawsuit adds that the Activision Blizzard deal would give Microsoft an unfair advantage — and stifle innovation — in areas like gaming subscription services and games. cloud games.

FTC is first regulator to try to block Microsoft’s acquisition of Activision Blizzard; several other countries, including Saudi Arabia and Brazil, have already endorsed the deal.

However, the acquisition is currently under intense scrutiny in the UK and Europe, where each regulator is to independently announce the findings of a more “thorough” Phase 2 review of the proposal in early next year.

Today’s announcement follows Microsoft’s last-ditch effort to allay regulatory fears over its acquisition, with the company announcing earlier this week that it had entered into a 10-year deal to bring Call of Duty to consoles. Nintendo if its takeover materialized. It was also reported to have offered the same commitment to PlayStation, although Sony said it was “as excited about this deal as Blockbuster was about the rise of Netflix”.

On Monday, the New York Post claimed that the FTC had softened its stance on blocking Microsoft’s proposed acquisition of Activision Blizzard and that the deal now seemed more likely to close. This was clearly not the case.