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Business Jun 13, 2023
An Activision Blizzard event in 2013. | Photo courtesy of Dinosaur918/Wikimedia Commons (CC BY-SA 3.0)
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Stepping up its opposition to Microsoft’s proposed $69 billion acquisition of Santa Monica-based gaming company Activision Blizzard, the U.S. Federal Trade Commission filed court papers Monday seeking a restraining order to block the deal from being consummated until the conclusion of an FTC administrative lawsuit challenging the sale.
In court papers filed in federal court in San Francisco, the FTC argued that a restraining order and preliminary injunction are needed because the two companies have indicated the deal could potentially be finalized “at any time.”
“A preliminary injunction is necessary to maintain the status quo and prevent interim harm to competition during the pendency of the FTC’s administrative proceeding to determine whether the proposed acquisition violates U.S. antitrust law,” according to the court papers.
The proposed $69 billion deal was announced in January 2022, but it has sparked antitrust concerns and fears of dampening competition for Microsoft’s Xbox gaming console. The FTC announced in December it was launching a legal challenge to the block the sale, saying Microsoft had a history of “acquiring and using valuable gaming content to suppress competition from rival consoles.” That challenge is being heard in an FTC administrative proceeding.
In their court papers Monday, FTC attorneys contended that Microsoft and Activision were considering finalizing the sale regardless of that administrative proceeding.
Activision Blizzard is known for developing popular games such as “Call of Duty” and “Candy Crush.”
FTC officials argued that Activision currently offers its games — including “World of Warcraft,” “Diablo” and “Overwatch” — for a variety of gaming consoles, but believes Microsoft may withhold such content from competing game console producers to boost the value and demand for Xbox.
Microsoft officials in December denied any such intentions.
“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 December statement.
“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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