FTC Suing to Block Microsoft’s $67 Billion Activision Blizzard Acquisition

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It has been announced by the Federal Trade Commission that it has filed a lawsuit to try and stop Microsoft from buying Activision Blizzard for $67 billion.

Microsoft, Sony, and regulators have been exchanging back and forth for weeks regarding competition concerns and the future of the Call of Duty franchise, and today they filed their lawsuit. In the FTC’s view, the acquisition would allow Microsoft to suppress competitors to its Xbox gaming consoles, its rapidly growing subscription content and cloud-based gaming businesses, and its rapidly growing subscription services.

Regulators in the UK and EU are also closely scrutinizing the deal despite Microsoft’s repeated efforts to appease them. With this latest development, Microsoft faces a significant hurdle in its attempt to close the Activision Blizzard deal, making it look far less likely it will be done quickly or without a major fight on the part of Microsoft.

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According to the Bureau of Competition director at the FTC, Holly Vedova, “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 gaming markets.”

A 10-year contract was offered by Microsoft to Sony for the release of new Call of Duty games last month, but Sony has not yet accepted the offer. It is worth mentioning that a similar deal was reached between Nintendo and Valve. If the Activision Blizzard deal is approved, the Activision Blizzard franchise could be available on Nintendo consoles, although little has been discussed on how that would look.

In the last few weeks, it has been clear that Microsoft has been frustrated by Sony’s objections to its Activision Blizzard deal. “Sony has emerged as the loudest objector,” Microsoft executive vice president Brad Smith recently stated in an op-ed for the Wall Street Journal, “It’s as excited about this deal as Blockbuster was about the rise of Netflix.”

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According to Microsoft, the UK’s Competition and Markets Authority (CMA) concerns are also “misplaced,” and the regulator should not have adopted “Sony’s complaints without considering the potential harm to consumers.”

Frank X. Shaw, Microsoft’s vice president of corporate communications, took to Twitter to share a link to a document titled “Get The Facts: How Microsoft is Committed to Growing Gaming Communities.”

What was once looking to be a deal that closed before 2023 is now facing headwinds that could make it very hard to push forward in its current form. Microsoft has outlined it will fight to allow the deal to go through, although it is hard to say what that fight will look like or how the end result of the deal with shape out. CGMagazine will update the story as more developments emerge.

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