US FTC Sues to Block Microsoft’s $69B Acquisition of Activision Blizzard – CNET [CNET]

The government agency said the massive deal would hurt competition. Microsoft has argued it won’t.

The US Federal Trade Commission on Thursday sued to block Microsoft’s $68.7 billion purchase of Call of Duty war simulation game maker Activision Blizzard, arguing the software giant would “harm competition in among gaming console companies, including Sony’s PlayStation and Nintendo’s Switch.

In its complaint, the FTC noted that Microsoft had used previous acquisitions, including of ZeniMax Media, to make several high-profile upcoming titles like the space exploration game Starfield and the vampire shooting game Redfall exclusive to devices powered by its software.

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” Holly Vedova, Director of the FTC’s Bureau of Competition, said in a statement. “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.”

Microsoft didn’t immediately respond to a request for comment. Company executives have spent the past couple months making assurances to public audiences and various government regulators around the world that it would not abuse its position as one of the largest video game makers. 

“We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC,” Microsoft President Brad Smith said in a statement after the FTC’s announcement. “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.”

Actvision Blizzard’s CEO Bobby Kotick released a statement Thursday saying, “I want to reinforce my confidence that this deal will close.”

The FTC’s move against Microsoft marks one of the US government’s biggest efforts to take on the tech industry, which has grown to turn companies like Microsoft, Apple, Amazon, Google parent Alphabet and Facebook parent Meta into some of the most highly valued companies on the planet. Amid all that growth, competitors and regulators have begun to ask if the tech industry has too much power and whether companies have been acting as monopolies.

Sony and its PlayStation division have raised concerns about the deal to regulators in the US and abroad, saying Microsoft’s assurances to keep hit titles like Call of Duty available for the PlayStation aren’t enough.

Microsoft has faced stiff pushback from EU regulators over its deal. In October, the European Commission asked other game developers for opinions on the acquisition. The commission opened an in-depth investigation into the deal last month, and Microsoft is reportedly ready to make concessions to appease the regulator. 

While FTC’s action doesn’t mean Microsoft’s deal is dead, a move like this by a federal regulator can lead to its failure. In 2011, the Department of Justice filed a lawsuit against AT&T when it attempted to merge with T-Mobile in a deal worth $39 billion. AT&T abandoned the deal later in the year.