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Business Dec 08, 2022
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The U.S. Federal Trade Commission voted Thursday to file a lawsuit to block Microsoft’s proposed purchase of Santa Monica-based gaming company Activision Blizzard, best known for games such as “Call of Duty” and “Candy Crush.”
The proposed $69 billion deal was announced in January, but it has sparked anti-trust concerns and fears of dampening competition for Microsoft’s Xbox gaming console.
In announcing the legal action, FTC officials said Microsoft had a history of “acquiring and using valuable gaming content to suppress competition from rival consoles.”
“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.”
According to the FTC, Activision currently offers its games — including “Call of Duty,” “World of Warcraft,” “Diablo” and “Overwatch” — for a variety of gaming consoles.
“But that could change if the deal is allowed to proceed,” according to the FTC. “With control over Activision’s blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely, resulting in harm to consumers.”
Microsoft officials defended the planned acquisition, insisting it would not stifle competition in the market.
“We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers,” Brad Smith, Microsoft’s vice chair and president, said in a statement to media outlets.
“We have been committed since Day One to addressing competition 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.”
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