- Kyle Chua
FTC Files Antitrust Complaint To Block Microsoft’s Takeover of Activision Blizzard
Microsoft's bid to buy out Activision Blizzard for US$67.8 billion is facing some resistance from the U.S. government.
According to Reuters, the Federal Trade Commission (FTC) has filed an antitrust complaint to block what could be the biggest gaming acquisition in history.
The independent agency said that if the deal was to proceed, Microsoft would have the capabilities to "suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business". It also claims the software giant had a record of hoarding valuable gaming content.
"Microsoft has already shown that it can and will withhold content from its gaming rivals," said Holly Vedova, Director of the FTC’s Bureau of Competition. "Today, we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets."
The FTC's commissioners reportedly voted in favour of the complaint, with three Democratic members approving it. Only Commissioner Christine S. Wilson voted against it in a closed-door meeting. Microsoft's acquisition of Bethesda Softworks' parent company, ZeniMax, in 2021 also played a factor in the agency's decision.
The agency has set August 2023 as the date for a hearing before an administrative law judge, where Microsoft intends to contest the decision.
"While we believe in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court," said Microsoft President Brad Smith.
Right now, the deal isn't necessarily dead yet, though it's unlikely for it to be resolved by July, which is the deadline Microsoft and Activision set to close it. If the deal doesn't close by then, the two can either renegotiate or end it there.
Not to mention, the deal is also being opposed by Sony over concerns that Microsoft could make games like Call of Duty exclusive to the Xbox platform. In response, Microsoft said it's willing to strike a deal with Sony to keep the popular first-person shooter franchise on PlayStation for as long as 10 years. Recently, Microsoft even approached Nintendo about bringing Call of Duty back to its systems if the deal closes, likely an attempt to sway the FTC vote.
Microsoft also previously said that the deal was meant to help it gain more ground in the mobile market, with Activision owning King, the developer and publisher behind the highly successful Candy Crush Saga.
But the FTC likely didn't buy any of the company's claims, with it believing the deal could hurt competition in the industry. "With control over Activision’s blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely, resulting in harm to consumers," the agency said.
Activision Blizzard owns franchises like World of Warcraft, Diablo, Overwatch and the aforementioned Call of Duty. The publisher's games have more than 154 million monthly active users.
The Federal Trade Commission (FTC) has filed an antitrust complaint to block Microsoft's bid to acquire Activision Blizzard for US$67.8 billion.
The independent agency said the software giant had a record of hoarding valuable gaming content and would "suppress competitors" if the deal was to close.
Right now, the deal isn't necessarily dead yet, though it's unlikely for it to be resolved by July, which is the deadline Microsoft and Activision set to close it.
The FTC has set August 2023 as the date for a hearing before an administrative law judge, where Microsoft intends to contest the decision.