Timothy “Timaugustine” Augustine
Microsoft’s acquisition of Activision Blizzard may not materialize after all.
According to a recent report by Politico, the Federal Trade Commission (FTC) will “probably” block Microsoft’s $69 billion purchase of gaming giant Activision Blizzard. The deal has come under intense scrutiny since it was announced, with even Sony protesting the acquisition for 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 prevent it after speaking to “three people with knowledge of the matter.” If the FTC proceeds with this lawsuit, it would be the largest move the agency has taken against tech companies like this one. Politico also said the lawsuit would be a “big black spot” for Microsoft, a company that has positioned itself as the good guy on antitrust issues.
That lawsuit is just a possibility at this point, as the report mentions that the FTC’s four commissioners have not ruled out a simple complaint or meeting with the companies’ attorneys. However, the staff involved in reviewing this deal for the FTC are skeptical of Microsoft and Activision Blizzard’s arguments for the acquisition, so it remains likely.
The agency fears that Microsoft’s acquisition of Activision Blizzard would give the company an unfair advantage in the gaming industry. Sony has told the agency and international regulators as much, 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, confirming to The New York Times that it has proposed a 10-year deal to make that happen.
Whichever path the FTC chooses to take, we should know as early as next month. The agency is still in the midst of investigating the merger, but most of the work is done, according to senior attorneys at both companies, including Microsoft’s Satya Nadella and Activision’s Bobby Kotick. Microsoft also has to worry about regulators from countries like Europe, where the European Commission has said it is in the second phase of an investigation into the deal.
So far, the merger of Microsoft and Activision Blizzard has not gone smoothly. The two companies have until July 2023 to close the book on that deal, but a lawsuit from the FTC could prevent that from happening in time.