FTC Will Attempt To Block Microsoft’s Activision-Blizzard Acquistion Due To The Harm It Would Have On Its Rivals

Microsoft’s A$97 billion (US$70 billion) acquisition of Activision-Blizzard hangs in the balance after the Federal Trade Commission today announced that it will seek to block the deal based on the adverse impacts it will have on its rivals and the industry.

The reasons behind the FTC’s decision are that if Microsoft acquires the Call the Duty publisher, the FTC believes that Microsoft “would gain control of top video game franchises, enabling it to harm competition in high-performance gaming consoles and subscription services by denying or degrading rivals’ access to its popular content.”

The FTC notes that during Microsoft’s acquisition of Zenimax (Bethesda), the company made assurances it would not withhold titles from rival platforms, to only then go and make upcoming titles such as Starfield and Redfall Microsoft exclusives. Holly Vedova, Director of the FTC’s Bureau of Competition, said that “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.”

Furthermore, the FTC alleges that 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.”

With control over Activision’s blockbuster franchises, 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, according to the FTC /6

— FTC (@FTC) December 8, 2022

In response to the announcement, Microsoft Vice Chair and President Brad Smith said that the company welcomes the opportunity to defend and push through its acquisition 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

What do you make of the news to block the deal? Do you think it’s the right or wrong call? Let us know in the comments or on social media.