FTC sues to block Microsoft’s acquisition of Activision Blizzard

Last week, reports surfaced that the Federal Trade Commission was split on whether or not to allow Microsoft’s titanic $69 billion acquisition of Activision Blizzard. Now, in a 3-1 vote in favor, the FTC has filed a lawsuit in an attempt to block the deal from going through.

In the filing, the FTC cites the acquisition’s potential to harm competition. If the deal were allowed to progress, Microsoft would gain control of the Call of Duty video game property, one of the most lucrative entertainment franchises of all time. As such, the FTC feels that Microsoft would gain an unfair market advantage.

“[The acquisition] would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business,” the post on the FTC site reads.

In the months since the deal was announced, Microsoft has assured its competitors that it does not intend to make future Call of Duty titles exclusive to Xbox consoles or the Game Pass subscription service. However, The FTC notes that Microsoft has a track of withholding content, most prominently in the wake of its acquisition of Bethesda Softworks parent company ZeniMax.

“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.”

With control over Activision Blizzard’s franchises, which, aside from Call of Duty, include Overwatch, World of Warcraft, and Diablo, Microsoft “would have 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.”

Since its announcement, the deal has fallen under intense scrutiny from parties both global and domestic. There’s no denying the far-reaching implications of a Microsoft-owned Activision Blizzard, and it seems antitrust experts are taking umbrage with such a situation. 

For its part, Sony has also expressed concern over the potential of a future where Call of Duty is an Xbox console exclusive. Reportedly, Microsoft offered Sony a 10-year contract on new Call of Duty titles should the acquisition go through. 

Moving forward, you can be sure the FTC’s filing will be closely followed.