The FTC has filed a lawsuit to block Microsoft’s $69 billion acquisition of Activision Blizzard, The Washington Post reports, citing concerns over the deal giving Microsoft an unfair advantage in key, burgeoning sectors of the games industry and concerns over the company withholding games from other platforms. The lawsuit follows an earlier report from Politico that the commission was preparing to halt the acquisition and petitions from senators and consumer advocacy groups asking FTC Chair Lina Khan to block the deal after citing concerns that it may hamper competition and give Microsoft control over too much consumer data.
Xbox head Phil Spencer recently announced plans for a deal to keep Call of Duty – one of the most lucrative game franchises – on multiple platforms, including Steam and Nintendo. However, the FTC’s suit cites previous instances where Microsoft made similar promises to keep new titles on other platforms when the Redmond company purchased Zenimax, owners of Bethesda Softworks, and yet announced upcoming Bethesda games Starfield and Redfall would be exclusive to Xbox after all.
Khan also expressed concerns over the deal harming innovation in subscription and cloud gaming. Microsoft previously said the Xbox branch struggles to compete in any sector of the games industry, though the company also reported over $3 billion in profit from its Xbox Game Pass subscription service, which includes cloud gaming, in 2022’s third quarter alone.
When the FTC files a suit to block a merger, the case goes to an administrative court, where a judge hears evidence from both sides and issues a ruling that may block the deal entirely or impose a set of conditions Microsoft must follow for the deal to go ahead. The Washington Post’s report didn’t say when the case may be brought to court. The deal is also facing increased scrutiny from U.K. regulators, who launched a second investigation that may stretch into January 2023.
Written by Josh Broadwell on behalf of GLHF
