FTC files antitrust suit against Microsoft-Activision Blizzard deal

The US Federal Trade Commission (FTC) has filed an antitrust suit to block Microsoft‘s $68.7 billion acquisition of Activision Blizzard, a video game developer.

The move is expected to create substantial hurdles for Microsoft in the acquisition of Activision Blizzard.

The FTC, in a complaint, alleged Microsoft’s deal would empower the company to suppress competitors to its Xbox gaming consoles and cloud-gaming business as well as eliminate competition in gaming consoles and subscription services.

The Commission pointed to Microsoft’s history of throttling competition from rival consoles, citing the latter’s acquisition of ZeniMax, the parent company of game developer Bethesda Softworks.

Microsoft acquisition of Activision Blizzard. Image courtesy of Microsoft.

The commission said Microsoft has made many of Bethesda’s titles including Starfield and Redfall Microsoft exclusives despite the company’s assurances to European antitrust authorities.

The Commission said post-closing, “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.”

Holly Vedova — FTC Competition Bureau Director said: “Microsoft has already shown that it can and will withhold content from its gaming rivals.

“Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

Microsoft offers home video game consoles Xbox Series S and Series X, apart from Xbox Game Pass, a video game content subscription service, and cloud-based video game streaming service.

Activision is a US-based video game developer and produced popular video game titles such as Call of Duty, Diablo, World of Warcraft, and Overwatch.

With millions of monthly active users globally, Activision currently offers its games on many devices irrespective of producer.

Regulators in the UK and the European Union are also examining the transaction thoroughly.

The all-cash deal between Microsoft and Activision Blizzard was signed in January 2022.