FTC Sues to Block Microsoft Activision Acquisition

The Federal Commerce Fee (FTC) sued to dam Microsoft $69 billion takeover of Activision Blizzard, which might be the largest acquisition within the online game trade.

The FTC voted 3-1 on Thursday to sue, claiming that the Xbox maker would have the “means and motive” to hurt the competitors by altering costs or degrading the standard of Activision’s (ATVI) high video games, which embody Name of Obligation, World of Warcraft, and Overwatch. The FTC warned that Microsoft (MSFT) may withhold content material from different programs altogether.

Key Takeaways

  • The FTC is suing to dam Microsofts $69 billion acquisition of online game developer Activision Blizzard.
  • The FTC stated that Microsoft would withhold Activision video games from different consoles, one thing it did after buying Bethesda Softworks in 2021.

“Microsoft has already proven that it might and can withhold content material from its gaming rivals,” stated Holly Vedova, Director of the FTC’s Bureau of Competitors. “In the present day we search to cease Microsoft from gaining management over a number one impartial sport studio and utilizing it to hurt competitors in a number of dynamic and fast-growing gaming markets.”

The vote was one of many strongest actions taken by federal regulators in a long time to rein within the energy of huge tech firms, a essential focus of the fee beneath the Biden administration. 

The FTC cited Microsoft’s 2021 acquisition of Zenimax Media Inc., the mum or dad firm of sport developer Bethesda Softworks, as proof of the corporate’s file for suppressing content material from the competitors. Microsoft made a number of Bethesda titles Microsoft exclusives after making certain European antitrust authorities that it will not achieve this.

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Activision Blizzard at present has greater than 400 million month-to-month energetic customers (MAU) throughout varied gaming platforms, whatever the platform’s producer. Microsoft’s Xbox is one in every of solely two sorts of high-performance sport consoles, and the FTC said that Microsoft can be motivated to take Activision’s video games off of the opposite one, the Ps.

Microsoft additionally has the main sport content material subscription service, Xbox Sport Cross, which had 25 million subscribers at first of this yr. The FTC apprehensive that it may make Activision video games unique to Sport Cross to spice up subscriber numbers, one thing the corporate hinted at when saying its acquisition of the online game producer.

Microsoft’s internet earnings this previous quarter was down 14% at $17.6 billion when in comparison with the identical quarter the yr prior. Its inventory is down 26% during the last 12 months, performing higher than the 30% drop within the Nasdaq Composite.