FTC Moves to Block Microsoft from Acquiring Activision Blizzard

UTC by Ibukun Ogundare · 3 min read
FTC Moves to Block Microsoft from Acquiring Activision Blizzard
Photo: Depositphotos

The FTC issued a press release stating that the $69 billion deal by Activision Blizzard is the largest investment by Microsoft.

The Federal Trade Commission (FTC) is seeking to block Microsoft (NASDAQ: MSFT) from acquiring video game company Activision Blizzard (NASDAQ: ATVI) as planned. The Commission said on Thursday that it had filed an antitrust case against the technology company to stop it from purchasing the video game company. According to the FTC, the move is to avoid Microsoft violating US law of suppressing competitors.

The latest development is one of many times the technology company would deal with competitive pressure. The US Department of Justice filed a broad antitrust case against the company in 1998. At the same time, UK regulators are also reviewing if the Activision Blizzard acquisition would reduce competition in the country.

FTC Seeks to Stop Microsoft Plans to Acquire Activision Blizzard

The FTC issued a press release stating that the $69 billion deal by Activision Blizzard is the largest investment by Microsoft. The agency added that the deal represents the largest in the video gaming industry. Per a complaint, Microsoft has a record of acquiring and using valuable gaming content to overpower rival consoles. The complaint referred to the company’s purchase of Bethesda Softworks’ parent company ZeniMax. The Director of the Bureau of Competition at FTX, Holly Vedova, commented on the deal between Microsoft and Activision Blizzard.

“Microsoft has already shown that it can and will withhold content from its gaming rivals. 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 markets.”

The FTC voted 3-1, with Commissioner Christine S. Wilson voting “no.” With the administrative complaint moving forward, the case will go before the agency’s internal administrative law judge. The FTC emphasized that Microsoft acquiring Activision Blizzard would mean the technology company having “the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition – including competition on product quality, price, and innovation. This loss of competition would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry.”

Unlike the FTC, Microsoft vice chair and president Brad Smith said the deal with Activision Blizzard would expand competition. The executive added that it would also bring more opportunities to games and game developers. He added:

“We have been committed since Day One to addressing competitive concerns, including by offering earlier this week proposed concessions to the FTC. While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court.”

Microsoft announced plans to acquire Activision Blizzard in January for $68.7 billion. While the deal was scheduled for completion in 2023, the boards of both companies had already approved the agreement.

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