The US FTC may block the Microsoft acquisition of Activision

The Federal Trade Commission may purse an antitrust lawsuit against Microsoft.

The Microsoft acquisition of Activision Blizzard is facing stiff opposition. Recently, the UK CMA and EU Commission announced that they are pursuing an in-depth investigation of the deal, citing antitrust concerns.

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The FTC will likely challenge the Microsoft acquisition of Activision Blizzard.

It looks like Microsoft will be facing another roadblock. The US Federal Trade Commission (FTC) is reportedly going to challenge the deal according to reports. The FTC may even be considering legal action against Microsoft.

Politico reports that sources familiar with the investigation shared that the US FTC is "likely to file an antitrust lawsuit to block Microsoft’s $69 billion takeover of video game giant Activision Blizzard." The lawsuit could be filed as early as next month.

The lawsuit could be the biggest stumbling block for Microsoft as the legal proceedings may take longer than the investigations done by the UK CMA and EU Commission. The UK and EU regulators have until March to report their findings.

The FTC has not made an official announcement on the matter. The commission is expected to decide on the deal before the month ends. The sources said that "heavy lifting is completed, including depositions of Microsoft chief executive Satya Nadella and Activision head Bobby Kotick."

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The FTC have the option to file an antitrust lawsuit against Microsoft to block the deal.

According to the report, four of the commissioners have yet to vote on the matter. The FTC hasn't met with lawyers from Microsoft and Activision to discuss the findings or potential concessions.

The FTC is concerned that Microsoft’s merger with Activision Blizzard would give it an unfair boost in the video game market. Microsoft is currently the third largest player in the video game market after Sony and Tencent.

Sony has been very vocal about its opposition to the deal. The rival fears Microsoft intends to make the Call of Duty franchise an exclusive title after its current deal with Activision has ended. Sony claims the move would place it at a significant disadvantage.

Microsoft pledged to keep the Call of Duty franchise available on PlayStation platforms. The company recently revealed that it offered Sony a ten-year deal to keep the title accessible to PlayStation owners. Phil Spencer, Microsoft’s Head of Gaming, also said that he's open to an even longer deal with Sony regarding the Call of Duty franchise.

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The FTC investigation goes beyond just the Call of Duty franchise to include other current and future IPs of Activision Blizzard.

The FTC’s concerns regarding the deal go beyond the Call of Duty franchise, claiming that "investigators are trying to determine how Microsoft could leverage future, unannounced titles to boost its gaming business."

Activision Blizzard recently issued a statement vowing to defend the deal. Company spokesperson Joe Christinat said that Activision Blizzard is cooperating with regulators globally for the deal to be finalized.

"Any suggestion that the transaction could lead to anticompetitive effects is completely absurd. This merger will benefit gamers and the U.S. gaming industry, especially as we face increasingly stiff competition from abroad," Christinat said regarding the FTC investigation. "We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but won’t hesitate to fight to defend the transaction if required."

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Activision Blizzard said it is prepared to defend the deal.

Microsoft stated it's willing to work with state regulators to guarantee the deal will push through.

Microsoft and Activision Blizzard have until July 2023 to finalize the deal. The parties would have to renegotiate the agreement if the deal is not closed by then. A lawsuit filed by the FTC in December or early next year could hamper the deal and force the parties to abandon it.

Microsoft has previously stated that it is confident that the deal would push through. Sony issued a statement that it believes the UK and EU regulators would disallow the deal.

Darryl Lara

Darryl has been gaming since the early 90s, loves to read books and watch TV. He spends his free time outside of gaming and books by riding his motorcycle and taking photographs. You can find Darryl on Instagram. Check him out on Steam and Xbox too.