FTC Sues to Block Microsoft's Takeover of Activision Blizzard

But Microsoft has good shot of winning a legal challenge
By Newser Editors and Wire Services
Posted Dec 8, 2022 4:15 PM CST
FTC Sues to Block Microsoft's Takeover of Activision Blizzard
The Activision Blizzard Booth during the Electronic Entertainment Expo in Los Angeles, June 13, 2013.   (AP Photo/Jae C. Hong, File)

The Federal Trade Commission said Thursday it is suing to block Microsoft’s planned $69 billion takeover of video game company Activision Blizzard, saying it could suppress competitors to its Xbox game consoles and its growing games subscription business. The FTC voted 3-1 to issue the complaint after a closed-door meeting, with the three Democratic commissioners voting in favor and the sole Republican voting against. A fifth seat on the panel is vacant after another Republican left earlier this year, reports the AP.

The FTC’s complaint points to Microsoft’s previous game acquisitions, especially of well-known developer Bethesda Softworks and its parent company ZeniMax, as an example of where Microsoft made some popular game titles exclusive despite assuring European regulators it had no intention to do so. "Microsoft has already shown that it can and will withhold content from its gaming rivals," said a prepared statement from Holly Vedova, director of the FTC’s Bureau of Competition. Microsoft’s president, Brad Smith, suggested in a statement Thursday that the company is likely to challenge the FTC’s decision.

"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," Smith said. Microsoft announced the merger deal in January but has faced months of resistance from Sony, which makes the competing PlayStation console and has raised concerns with antitrust watchdogs around the world about losing access to popular Activision Blizzard game franchises such as Call of Duty. Microsoft had been ramping up its public defense of the deal in recent days as it awaited a decision. Smith said Microsoft has been committed to addressing competition concerns and brought proposed concessions to the FTC earlier this week.

Microsoft announced its latest promise Wednesday, saying it would make Call of Duty available on Nintendo devices for 10 years should its acquisition go through. It has said it tried to offer the same commitment to Sony. William Kovacic, a former chair of the FTC, said trying to block this acquisition could trigger a legal challenge from Microsoft that the company has a good chance of winning. "It’s evident that the company has been making a number of concessions," he said. "If the FTC turns down Microsoft’s commitments, Microsoft would likely raise them in court and say the FTC is being incorrigibly stubborn about this."

(Read more Microsoft stories.)

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