On Wednesday Politico reported that the U.S. Federal Trade Commission (FTC) appears set to block Microsoft Corp’s $69 billion takeover bid for videogame maker Activision Blizzard Inc, by filing an antitrust lawsuit, according to sources familiar with the matter.
The source notes that the FTC’s four commissioners have yet to meet to vote on a complaint, or meet with lawyers for the companies, so a lawsuit challenging the deal is not guaranteed. However the source noted that FTC staff reviewing the deal are not yet accepting the companies’ arguments.
Activision Blizzard said through a spokesperson, “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.” The spokesperson added, any allegation there could be anticompetitive effects is “completely absurd.”
After closing 1% up, shares of Activision fell 2% in extended trading.
In January, Microsoft announced it would be purchasing Activision, the maker of “Call of Duty” and “Candy Crush.” It would have been the biggest gaming industry deal in history. Microsoft had hoped the acquisition would help it to better compete with videogame leaders Tencent and Sony.
The deal is also meeting opposition outside the US. The EU has opened a full investigation into it earlier this month. The EU regulator said it would announce its decision on whether to block the deal by March 23, 2023. Britain’s anti-trust watchdog said it will also be investigating the deal.
The worry is, Microsoft could refuse to give rivals access to Activision’s best selling games, and that means the acquisition could damage the entire videogame industry.
In trying to allay the concerns of others such as rival Sony, Microsoft President and Vice Chair Brad Smith has said, “Sony, as the industry leader, says it is worried about ‘Call of Duty,’ but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation.”
A Microsoft spokesperson said, “We are prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence. We’ll still trail Sony and Tencent in the market after the deal closes, and together Activision and Xbox will benefit gamers and developers and make the industry more competitive.”
