Image via Activision
According to a new report by Politico, the Federal Trade Commission (FTC) is likely to file an antitrust lawsuit to block Microsoft’s proposed nearly $70 billion acquisition of Activision Blizzard.
If the lawsuit is filed, it would be the biggest push against technology companies by the FTC under Chair Lina Khan. It would also be a major blow for Microsoft.
It is not guaranteed that a lawsuit will be filed, and the FTC commissioners still have to vote out a complaint or meet with lawyers for the companies, people familiar with the matter have claimed.
The FTC’s biggest concern currently is if acquiring Activision would give Microsoft an unfair advantage in the market of video games. Activision Blizzard is the publisher of hit titles like Call of Duty, which is the current major focus of most investigations. Sony has spoken against the deal, fearing that players will move to Xbox. Currently, Sony is ahead of Xbox with its PlayStation console.
Back in October, Sony made a statement to the UK’s Competition and Markets Authority, explaining that if Microsoft buys Activision, it will leave consumers and developers with less choices. Sony claimed that Microsoft is a “Tech Titan buying up irreplaceable content at incontestable prices ($68.7 billion) to tip competition to itself.”
Microsoft made its own statement to the UK regulator, saying that Sony is making statements to try and maintain its top position in gaming. “The suggestion that the incumbent market leader, Sony, with clear and enduring market power, could be foreclosed by the smallest of the three console competitors, Xbox, as a result of losing access to one title, is not credible.”
Microsoft has made several promises to Sony that Call of Duty would remain on PlayStation and that Call of Duty is not a must-have title, as Sony claims. Microsoft has also noted that Call of Duty is not on any subscription services and that adding it to Xbox Game Pass would not harm Sony.
Recently, Microsoft promised Sony it would get Call of Duty guarantied for the next ten years on PlayStation. It is currently unknown how Sony responded.
“Any suggestion that the transaction could lead to anticomp effects is completely absurd. This merger will benefit gamers and the US gaming industry, especially as we face increasingly stiff competition from abroad,” Activision spokesperson Joe Christinat said.
“We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but will not hesitate to fight to defend the transaction if required,” Christinat added.
Microsoft spokesperson David Cuddy said the tech company “is prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence. We’ll still trail Sony and Tencent in the market after the deal closes, and together Activision and Xbox will benefit gamers and developers and make the industry more competitive.”
If a lawsuit is filed by the FTC, it would likely extend beyond the deadline that both companies have to close the deal. Activision and Microsoft must close the acquisition by July 2023 without renegotiating the agreement.
The European Commission also recently opened an in-depth investigation into the matter.
Zainah Yousef
Zainah Yousef is the author of The Fallen Age Saga and specializes in gaming, social media advice, and reviews. She's been writing all her life and she probably won't stop anytime soon.
