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Feds Sue To Prevent Microsoft’s Activision Deal From Going Through [Update]

A photo shows the Activision Blizzard logo on a phone in front of the Microsoft logo.
A photo shows the Activision Blizzard logo on a phone in front of the Microsoft logo.

According to a report from the Washington Post, the Federal Trade Commission has sued to block Microsoft’s acquisition of Activision Blizzard on the grounds that the deal would threaten to suppress competition within the gaming industry.

Earlier this year, Microsoft broke the internet with the announcement that it had plans to acquire Activision Blizzard for a whopping $69 billion. Since the announcement, Microsoft has come under scrutiny from government officials in the U.S. and abroad, some of whom feel the deal would heavily tip the scales in Microsoft’s favor against its competitors. According to the FTC’s press release, the agency reasoned that Microsoft would be able to stifle its competitors by making games Xbox exclusives and manipulating game prices, should the deal go through.

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“Microsoft has already shown that it can and will withhold content from its rivals,” Holly Vedova, the FTC’s Bureau of Competition director said in the press release. “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 markets.”

Read More: Microsoft’s $70 Billion Purchase Of Activision Was Inevitable

Sony has particularly made a sticking point over the leverage that owning Call of Duty could give the Xbox maker. Just this week, Microsoft boss Phil Spencer extended a thinly-veiled olive branch to Xbox’s competitors by announcing on Twitter that the company plans on bringing Call of Duty to the Nintendo Switch and Steam.

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“Our acquisition will bring Call of Duty to more gamers and more platforms than ever before. That’s good for competition and good for consumers,” Microsoft president Brad Smith wrote in a tweet. “Thank you @Nintendo. Any day @Sony wants to sit down and talk, we’ll be happy to hammer out a 10-year deal for PlayStation as well.”

Update 12/08/2022 5:30 p.m. ET: Kotaku received an internal email that Activision Blizzard CEO Bobby Kotick shared with his employees regarding the FTC’s efforts to block Microsoft’s acquisition of the company:

Team,

I wanted to provide a brief update on our pending merger with Microsoft. This week the U.S. Federal Trade Commission (FTC) announced its decision to challenge the deal. This means they will file a lawsuit to block the merger, and arguments will be heard by a judge.

This sounds alarming, so I want to reinforce my confidence that this deal will close. The allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge.

Thanks to the hard work by all of you every day, we’re on a strong path, bringing epic joy to players around the world with what I believe are the greatest games in the industry. At the same time, the competitive landscape is shifting, and, simply put, a combined Microsoft-ABK will be good for players, good for employees, good for competition and good for the industry. Our players want choice, and this gives them exactly that. You can read more about the specifics on those points in this update we recently shared with you.

We believe these arguments will win despite a regulatory environment focused on ideology and misconceptions about the tech industry.

Thank you for your dedication and creativity.

Bobby

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