UNITED STATES: In a stunning turn of events, the Federal Trade Commission (FTC) has taken legal action to prevent Microsoft’s colossal $70 billion purchase of video game company Activision Blizzard.
The FTC’s lawsuit, filed in federal court in San Francisco, seeks to block the acquisition that would grant Microsoft control over gaming franchises like Call of Duty and World of Warcraft.
The regulatory scrutiny surrounding the Microsoft-Activision merger has been ongoing, with global regulators expressing concerns about potential monopolistic control and unfair advantages in the cloud-based gaming market. Sony has been particularly vocal in opposing the deal.
Microsoft struck a deal with Nintendo to license Activision titles for a decade to alleviate concerns and gain support. The company also extended the same offer to Sony if the acquisition proceeded.
While European regulators and several other countries have approved the deal with certain conditions, it has faced hurdles, including the UK’s Competition and Markets Authority’s decision in April and the current FTC lawsuit.
Microsoft, the creator of the Xbox game system, has voiced its readiness to defend its position in federal court.
Microsoft’s vice chair and president, Brad Smith, expressed confidence that an accelerated legal process would foster greater choice and competition in the market. Public Citizen, a US-based consumer advocacy group and staunch opponent of the deal applauded the FTC’s actions.
Matt Kent, Public Citizen’s competition policy advocate, emphasized that Microsoft’s attempts to expedite the purchase before completing the FTC’s process had prompted the agency’s legal intervention.
The FTC’s decision to file in federal court underscores its determination to stand firm against Microsoft’s escalation tactics. With the fate of the Microsoft-Activision deal now hanging in the balance, industry observers and gamers eagerly await the outcome of the legal battle.
The acquisition would mark the most expensive merger in tech industry history if successful. However, if the FTC’s lawsuit proves victorious, it could be a significant blow to Microsoft’s aspirations and reshape the landscape of the gaming industry.
The court proceedings, set to commence shortly, will determine the fate of this high-stakes acquisition and its potential ramifications.