The United States Federal Trade Commission has submitted a demand to block Microsoft’s purchase of Activision Blizzard, an operation in which those from Redmond want to invest 68,700 million dollars. The FTC alleges that this purchase will “hurt competition” among game console manufacturers such as Sony and Nintendo.
In the text of the lawsuit, the FTC has pointed out that Microsoft has used companies it has bought before, such as ZeniMax Media, to make several high-end titles, such as Starfield or Redfall, exclusive to devices with its software. According to Holly Bedova, Director of the FTC’s Office of Competition«Microsoft has already shown that it can, and that it will push content away from its gaming rivals. We want to prevent Microsoft from gaining control of a leading independent studio and using it to hurt the competition in many fast-growing and dynamic gaming markets.«.
The FTC believes so despite the fact that the executives of Activision or Microsoft have spent weeks assuring their audience and various regulatory entities around the world that Microsoft will not abuse its position as one of the largest video game publishers and manufacturer of the Xbox console. But Sony, and specifically its PlayStation division, has raised concerns about the deal both with regulators in the United States and abroad, saying it’s not enough for Microsoft to say it will make titles like Call of Duty are available for the PlayStation.
Thus, the Microsoft President Brad Smithhas responded on Twitter to the announcement of the FTC’s lawsuit, noting that they carry “committed from the outset to address competition concerns, even offering earlier this week to make the concessions proposed by the FTC. Although we believed that we would have the party in peace, we completely trusted our case, and we accepted the opportunity to present our case in court.«.
We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believe in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present it in court.
—Brad Smith (@BradSmi) December 8, 2022
or his part, the Activision Blizzard CEO Bobby Kotickhas released a statement, in which it has reiterated its confidence that the company’s purchase agreement will be closed, and that the purchase will take place.
The step that the FTC has taken against Microsoft, after several months of investigation into the agreement, highlights one of the main efforts of the United States government to stop the big technology companies, which have become some of the companies of highest value in the world. Apart from this growth, both competition and regulators have long wondered if the tech industry has too much power and if some companies have been behaving like monopolies.
Microsoft is also facing problems getting this purchase through with regulators in the UK and the European Union. Last October, the European Commission asked other game developers for their opinion on the purchase. In November, in addition, they opened an in-depth investigation into the operation, and it is more than likely that Microsoft will make concessions to satisfy the regulatory entity.
As for the FTC’s lawsuit, does not in itself imply that the Microsoft-Activision deal is deadbut a step of this caliber taken by a federal regulator can lead to the purchase failing, so we will have to wait and see how the situation evolves.
