FTC sues to block Microsoft’s acquisition of Activision Blizzard

fmr said it was the boldest move the Biden administration has made towards police mergers.  Chairman of the FTC

Federal Trade Commission speak on Thursday, it filed an antitrust lawsuit against Microsoft to challenge the software maker’s attempt to acquire a video game publisher Activating blizzard.

This is not the first time Microsoft has dealt with competitive pressure. In 1998, the US Department of Justice filed an extensive antitrust lawsuit against the company. Microsoft change some practices The result is related to its Windows operating system business. Regulators in the UK are looking into whether the acquisition of Activision Blizzard will reduce competition in the country.

Microsoft announced the plan to acquire Activision Blizzard for $68.7 billion in January, with a target to close in June 2023. The deal has come under pressure from Microsoft’s competitors in the gaming space, such as such as sony. Microsoft has repeatedly said that it would not become a world leader in games if the deal ended, and it did. swore to offer popular “Call of Duty” games on gaming platforms other than those owned by Microsoft.

“We continue to believe this agreement will expand competition and create more opportunities for gamers and game developers,” Brad Smith, Microsoft vice president and president, said in a statement. declare. “We’ve been committed since Day One to address competition concerns, including delivering proposed concessions earlier this week to the FTC. While we believe in creating opportunities opportunity for peace, but we have full confidence in our case and welcome the opportunity to present our case in court.”

The FTC trustees voted 3-1 to continue the agency’s administrative complaint, which will be brought before the FTC’s internal administrative law judge. In the process, the ALJ makes an initial decision following a trial-like procedure. The respondent or FTC employee acting as a “complaint attorney” may choose to appeal the original decision before the full committee for a vote. The defendant can then still ask the federal appeals court to review the commission’s order.

“Microsoft has shown that it can and will withhold content from its gaming competitors,” Holly Vedova, director of the FTC’s competition office, was quoted as saying in a statement. “Today, we seek to prevent Microsoft from gaining control of a leading indie game studio and using it to harm competition in many dynamic and fast-growing game markets.”

FTC sues Microsoft over proposed Activision deal

In the statement, the FTC said Activision Blizzard has brought its games to a variety of devices, regardless of their manufacturer, but that could change if Microsoft finalizes the deal.

Microsoft offers exclusive titles for its Xbox console, and in October, Phil Spencer, Microsoft’s Gaming CEO, shown that Sony has its own exclusive franchise, but over time, Microsoft has brought games like Minecraft to other devices. It’s important, he argues, that more people, not fewer, play the games the company owns. Microsoft is looking to add subscribers to a Game Pass service that provides access to hundreds of games.

The FTC asserts that Microsoft has records, including ZeniMax Offers 2021, buy games and use moves to block competition from other console manufacturing companies. Microsoft made ZeniMax games like Starfield and Redfall exclusives after telling European antitrust regulators that it had no incentive to stop people from playing the game on consoles other than Xbox. this agency said.

“We want Call of Duty to be enjoyed by many players around the world. That requires COD to be available on various platforms following the Microsoft + Activision Blizzard merger,” said Lulu Cheng Meservey, executive vice president. Activision’s head of corporate affairs and communications director, said in a statement tweet.

The lawsuit represents an important milestone for FTC President Lina Khan, who has long signaled positive action on the technology. While her tenure has included a lawsuit seeking to block the Facebook owner meta from the acquisition of a virtual reality fitness app developer, the lawsuit aimed to block the Microsoft-Activision deal is notable for its size, because Biggest tech deal hitherto.

Khan and her partner at the Justice Department’s antitrust division, Jonathan Kanter, said they want agencies to become more comfortable with making big changes, adding that the record won High in court may mean they are not defiant enough to take the case.

Smith previewed Microsoft’s arguments against blocking the deal in a Opinion of the Wall Street Journal published earlier this week, said it would be a “huge mistake.”

“Microsoft faces major challenges in the gaming industry,” Smith wrote, adding that its Xbox console gaming system came in at third place behind Sony’s PlayStation and Nintendo Switch. Microsoft also “doesn’t have a significant presence in the mobile game industry,” he said. He turned his attention towards Apple and Googlesays that while mobile games are a fast-growing and high-revenue segment, the two app store operators derive “a substantial portion” of that income through their fees. for developers.

Smith argues that Microsoft’s acquisition of Activision will help it compete effectively in the gaming industry, driving innovation and supporting customers. He downplayed the concerns of competitors like Sony, saying the company is “as excited about this deal as Blockbuster is about the rise of Netflix.”

Shares of Activision Blizzard hit a session low of $73 per share after the FTC announced its case. Microsoft has agreed to pay $95 per share.

Bobby Kotick, CEO of Activision Blizzard, told staff in A memo that the assertion that the agreement is anticompetitive is inconsistent with reality.

“Simply put, the Microsoft-ABK combination should be good for players, good for employees, good for competition, and good for the industry,” he wrote. “Our players want choice, and this gives them exactly that.”

politics reported last month that the FTC is likely to try to block the deal.

This is breaking news. Please check back for updates.


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