FTC sues to stop Microsoft's acquisition of Activision Blizzard

The deal, which was supposed to be finalized in June 2023, has come under pressure from Sony, the owner of the PlayStation console and one of Microsoft's biggest gaming competitors.

The Federal Trade Commission (FTC) is attempting to stop the purchase of video game company Activision Blizzard by Microsoft after the tech giant announced its intent to buy the Call of Duty publisher for $68.7 billion back in January.

On Thursday, the FTC filed the case against Microsoft, arguing that the corporation's attempt to acquire Activision Blizzard violates antitrust law, reported CNBC.

If Microsoft, which already owns Xbox Game Studios, got ownership of Activision and its plethora of games, the FTC suit says they would have "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."

The FTC's complaint also targeted Microsoft's business practices in regard to games created by Bethesda/ZeniMax, which Microsoft acquired for $7.5 billion in 2020, according to Axios. Some of the major titles produced by Bethesda Game Studios under Microsoft are the Fallout and Elder Scrolls games.

"Microsoft decided to make several of Bethesda's titles, including Starfield and Redfall, Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles," the commission stated.

In a 3-1 vote, the FTC filed the administrative complaint to try and block Microsoft's purchase.

"We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers. 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 on Twitter.

"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," he added.

The deal, which was supposed to become finalized in June 2023, has come under pressure from Sony, the owner of the PlayStation console and one of Microsoft's biggest gaming competitors.

After Microsoft announced its plan to buy Activision, Sony shares dropped by over 12 percent as investors speculated on whether or not PlayStation would get access to hit Activision games, according to CNBC.

However, Smith says that Microsoft isn't looking to take Activision games off of PlayStation, saying that it would be an "economically irrational" decision."

"Given the popularity of cross-play, it would also be disastrous to the 'Call of Duty' franchise and Xbox itself, alienating millions of gamers," the president said. He then announced an offer to Sony to alleviate their fears.

"That's why we've offered Sony a 10-year contract to make each new 'Call of Duty' release available on PlayStation the same day it comes to Xbox. We're open to providing the same commitment to other platforms and making it legally enforceable by regulators in the U.S., U.K. and European Union," he said.

The move by the FTC is the US government's biggest tech-antitrust action in years, according to Axios.

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