Image: Activision
Microsoft’s takeover of Activision Blizzard might not go through after all.
The Federal Trade Commission (FTC) is ‘likely’ to block Microsoft’s $69 billion purchase of games giant Activision Blizzard, according to a recent report from Politico. The deal has been the subject of intense scrutiny since its announcement, with even Sony protesting the acquisition out of fear of losing the Call of Duty franchise to Xbox consoles.
Politico reports that the FTC is likely to file an antitrust lawsuit against the acquisition to stop it from happening, having spoken to, “three people with knowledge of the matter.” If the FTC goes forward with this lawsuit, it would be the biggest move the agency has made against technology companies like these yet. Politico also states that the lawsuit would be a ‘major black mark’ for Microsoft, a company that has positioned itself as the good guy on antitrust issues until now.
This lawsuit is merely a possibility at this point, as the report mentions that the FTC’s four commissioners haven’t ruled out making a simple complaint or meeting with the companies’ lawyers. The staff involved in reviewing this deal for the FTC are sceptical of Microsoft and Activision Blizzard’s arguments for the acquisition however, so it remains likely.
The agency is concerned that Microsoft’s acquisition of Activision Blizzard would give the company an unfair advantage in the games industry. Sony has said as much to the agency and international regulators, arguing that franchises like Call of Duty would put PlayStation at a significant disadvantage. Meanwhile, Microsoft has committed to keeping Call of Duty on PlayStation consoles and confirmed to the New York Times that it had proposed a 10-year deal to make that happen.
Whichever route the FTC decides to take, we should know about it as early as next month. The agency is still in the midst of investigating the merger, but most of the work is done following depositions of high-ranking suits in both companies such as Microsoft’s Satya Nadella and Activision’s Bobby Kotick. Microsoft also has to worry about regulators from countries like Europe, where the European Commission announced that it was in the second phase of an investigation into the deal.
Thus far, it hasn’t been smooth sailing for the Microsoft-Activision Blizzard merger. The two companies have until July 2023 to close the book on this deal, but a lawsuit from the FTC could prevent that from happening in time.
