Microsoft and Activision have both responded to the Federal Trade Commission’s (FTC) attempt to block the planned merger between the companies.
Earlier this month, the FTC announced that it is planning to file a lawsuit in a bid to stop Microsoft’s $69 billion acquisition of Activision. The FTC argues that Microsoft would be able to “suppress competitors” to its Xbox consoles, subscription content, and cloud gaming.
Additionally, regulators are concerned that the merger will harm PlayStation’s ability to compete given Microsoft’s potential ownership of Call of Duty should the merger go through.
Here’s What Microsoft Said
Microsoft responded to the FTC’s announced plans, saying: “The acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry. That is particularly so when the manufacturer has made it clear it will not withhold the game.
“The fact that Xbox’s dominant competitor has thus far refused to accept Xbox’s proposal does not justify blocking a transaction that will benefit consumers. Giving consumers high-quality content in more ways and at lower prices is what the antitrust laws are supposed to promote, not prevent.”
The FTC stated in its complaint that Microsoft has a track record of acquiring valuable gaming content and making them Xbox exclusives, “despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.”
Microsoft rejected the claims, but confirmed that it “anticipates that three future [Bethesda[ titles–[redacted], all of which are designed to be played primarily alone or in small groups–will be exclusive to Xbox and PCs.”
Microsoft continued, writing, “Any suggestion that Microsoft’s statements to the European Commission about ZeniMax were misleading is incorrect. Microsoft explicitly said it would honor Sony’s existing exclusivity rights and approach exclusivity for future game titles on a case-by-case basis, which is exactly what it has done.
“The European Commission agrees it was not misled, stating publicly the day after the Complaint that Microsoft did not make any ‘commitments’ to the European Commission, nor did the European Commission ‘rely on any statements made by Microsoft about the future distribution strategy concerning ZeniMax’s games’.”
Activision Responds to FTC As Well
Activision also said that the FTC was misreading the realities of the competitive gaming industry and that it was “turning antitrust on its head.”
“The FTC ignores the significant benefits of the Transaction in favor of a warped attempt to ignore the facts and rewrite antitrust law and settled precedent in order to protect Xbox’s competitors from hypothetical harm that has no basis in marketplace realities,” the Call of Duty publisher claimed.
It continued, writing: “Adding Activision’s content to multigame subscription and cloud gaming, where it would not have been available otherwise, is plainly output enhancing and gives garners more options on how and where to engage with Activision content.
“Activision, and particularly its King division, will also enable the acceleration of Xbox’s early non-existent mobile gaming business, which would enhance competition in the fastest growing segment of gaming. And the transaction will ultimately expand the capital support and talent available to Activision’s game development studios, driving further innovation in new games and technologies.
“The FTC’s disregard for these benefits to consumers and focus on supposed harms to Xbox’s deep-pocketed competitors betrays a fundamental disconnect between the FTC’s theories and the antitrust laws’ underlying purpose, which is to protect competition, not competitors. The FTC is asking this Court to protect the world’s largest gaming companies from further competition from Xbox, and thereby turning antitrust on its head.
“Blinded by ideological skepticism of high value technology deals and by complaints from competitors, the FTC has not only lost sight of the realities of the intensely competitive gaming industry, but also the guiding principles of our nation’s antitrust laws.”
Microsoft and Activision have claimed the FTC’s approach to the merger is unconstitutional and that it violates the Fifth Amendment right to equal protection and procedural due process.
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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.
