FTC Reported to ‘Likely’ Fight Microsoft’s Acquisition of Activision Blizzard
The Federal Trade Commission (FTC) is said to be moving forward on filing an antitrust suit in order to block Microsoft’s substantial acquisition of Activision Blizzard. News of this comes as Microsoft awaits approval from UK regulators.
According to three people familiar with the matter, the FTC is “likely to file an antitrust lawsuit to block Microsoft’s $68.7 billion takeover of video game giant Activision Blizzard.” Politico reports that while the FTC is moving in, Microsoft and Activision Blizzard are preparing to counter.
The report states that both companies have already received and filed depositions from their respective CEOs. Microsoft’s Satya Nadella and Activision Blizzard’s Bobby Kotick have already done “much of the heavy lifting.”
The FTC is aiming to squash the deal which would see hit franchises such as Call of Duty, Candy Crush, Overwatch, and more fall under Microsoft’s Xbox Game Studios umbrella. In the eyes of the FTC, this deal would give Microsoft a marketplace advantage. Activision Blizzard is one of the world’s largest third-party development houses and publishers. The FTC believes Microsoft would have an unfair advantage over competitors such as Sony and its PlayStation brand. Keep in mind, the FTC did investigate the acquisition earlier this year as well.
If the FTC does indeed aim to file an antitrust suit, it’s believed that it may arrive as soon as next month. The FTC is hot off the heels of blocking another merger. This month, U.S. District Judge Florence Y. Pan decided to stop the proposed $2.2 billion merger of Penguin Random House and Simon & Schuster.
Meanwhile, Microsoft is currently attempting to gain the approval of UK regulators. In what’s become a very public debate between Microsoft, Sony, and other companies within the industry, the UK’s Competition and Markets Authority (CMA) aims to investigate whether the deal will give Microsoft a competitive advantage.
One of the major points of contention is the exclusivity (or current lack thereof) of Call of Duty. PlayStation CEO Jim Ryan has argued that Microsoft may withhold future Call of Duty titles from PlayStation following the current deal in place. However, Xbox head Phil Spencer has categorically iterated that Call of Duty will remain on PlayStation consoles “as long as there’s a PlayStation out there to ship to.” In order to calm the waters, Spencer is said to have offered Sony a deal which would see the franchise continue to ship on PlayStation for the next 10 years.
Microsoft and Activision Blizzard have until July 2023 to close the deal. If the deal continues to face hiccups, the two may need to renegotiate terms. Activision Blizzard and Kotick are currently under investigation due to allegations of workplace harassment and “frat boy culture” within the workplace. Kotick is accused of knowing about said allegations and turning a blind eye.