The Federal Trade Commission (FTC) has sued to block the nearly $69 billion deal that would see Microsoft acquire Activision Blizzard. This comes after Microsoft recently tried to make concessions to help the deal in Europe and announced 10-year deals with Steam and Nintendo to have Call of Duty on those platforms.
The lawsuit under FTC chair Lina Khan says that the deal “would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business”. The suit calls up examples from prior acquisitions, including Microsoft’s acquisition of ZeniMax and subsequent decision to make some big Bethesda titles Xbox and PC-exclusives, including the upcoming Starfall, the company’s first new IP in decades. This, the FTC claims,was done despite Microsoft having said there was no intention to withhold content from rival platforms.
While the subject of a lawsuit on the verge of happening was recently reported, there were also reports of Microsoft offering some things to help the deal pass in Europe, including in the UK, where the deal is under an advanced review process. Part of those concessions was an offer to Sony to keep Call of Duty on PlayStation for 10 years. This week, Microsoft announced it had offered and signed that same deal with Steam and Nintendo for the franchise to be on Switch. Sony has not responded or accepted an offer, if one was formally extended.
Part of what’s at stake is the size of the deal. An antitrust deal of this nature is centered on not only keeping some franchises off other platforms, but the reach and potential to stifle quality, to consumers’ disadvantage if there’s not healthy competition.
“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,” the complaint reads.
Later, there was some doubt that the FTC would actually file suit, but the process has clearly begun. The four-person panel approved the filing 3-1.
Read the full FTC press release, which includes the official case filing).