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US sues to block Microsoft from buying ‘Call of Duty’ maker Activision | Business and economic news


The US trade regulator has filed a complaint to block tech giant Microsoft’s $69 billion bid to buy “Call of Duty” game maker Activision over concerns over the deal. will deny opponents access to popular games.

Microsoft, which owns Xbox, said in January 2022 that it would buy Activision for $68.7 billion in 2022. The biggest game industry deal in history.

In Thursday’s complaint, the Federal Trade Commission, an antitrust law enforcement agency, said Microsoft had a history of purchasing valuable game content and using that content to prevent competition. compete from rival dashboards.

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

Microsoft President Brad Smith said the company will fight the FTC. “While we believe in creating a chance for peace, we fully believe in our case and welcome the opportunity to present our case in court,” he said.

The decision to sue comes as the administration of US President Joe Biden takes a more aggressive approach to antitrust enforcement. The US Department of Justice recently blocked a The $2.2 billion merger between Penguin Random Houselargest book publisher in the world and a smaller US competitor Simon & Schuster.

Shares of Microsoft and Activision both fell on news of the FTC complaint. Shares of Activision fell 2.3% to $74.19 a share, while Microsoft slipped from its previous high but was still trading nearly 1% higher on the day at $246.31 .

Microsoft has said it wants to buy Activision to help it compete with game leaders Tencent and PlayStation owner Sony, which the company has criticized for the deal.

The FTC said its concern was that Activision’s popular games, including “World of Warcraft” and “Diablo,” would no longer be available on a wide range of consoles, PCs and mobile devices.

While Microsoft has proposed concessions to address competition concerns, the rapid pace of change in the tech and games industries could render those conditions useless over time.

To appeal to regulators, shortly after the deal was announced, Microsoft released a new set of guidelines for its app store, including open access for developers who met the standards. about privacy and security.

And in December, in another move in response to outspoken criticism, Microsoft signed a 10-year commitment to bringing “Call of Duty” to Nintendo platforms, bringing the first-person shooter series to Nintendo. The first famous came to the company. Microsoft made a similar offer to Sony.

Chairwoman Lina Khan and two Democrats on the committee voted in favor of the complaint, while Commissioner Christine Wilson voted “no”.

Activision Blizzard CEO Bobby Kotick told employees on Thursday he was confident the deal would go ahead.

“The allegation that this deal is anticompetitive does not fit with the facts and we believe we will win this challenge,” he told employees, saying he believes the companies’ arguments The company will win “despite a regulatory environment that focuses on ideology and misconceptions about the tech industry.”

overseas headwinds

The deal also faces regulation headwinds in Europe.

At the end of November, Microsoft is expected to present remedies to EU antitrust regulators in the coming weeks to prevent formal objections to the deal, people familiar with the matter said. belonging to this matter said. The deadline for the European Commission to issue a formal list of competition concerns, known as a statement of objection, is in January.

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