FTC Sues to Block Microsoft’s $69 Billion Acquisition of Activision Blizzard

The Federal Trade Commission has sued to block Microsoft’s $69 billion acquisition of Activision Blizzard, challenging one of the largest tech acquisitions in history.

The administrative complaint filed by the FTC alleges that the blockbuster deal, which would make Microsoft the third-largest video game publisher in the world, would give Microsoft “both the means and motive to harm competition” — claiming it could negatively affect prices of video games as well as game quality and player experiences on consoles and gaming services, according to an agency release.

“We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers,” Brad Smith, Microsoft’s president, said in a statement Thursday. “We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court.”

In an email sent to employees and provided to CNN, Activision CEO Bobby Kotick said the FTC suit may sound “alarming” but he remains confident the deal will close. “The allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge,” he said.

The US merger challenge reflects the biggest setback yet for Microsoft as it has aggressively courted regulators around the world in hopes of persuading them to bless the deal. It also marks the FTC’s most significant challenge to the tech industry since it sued to break up Facebook-owner Meta in 2020, underscoring US officials’ vocal promises of a tough antitrust enforcement agenda.

“This is the boldest move the Biden administration has made so far to police mergers involving Big Tech and to expand the realm of merger enforcement,” said William Kovacic, a law professor at George Washington University and a former FTC chairman. “More than anything else they’ve done, this embodies their commitment to get tough on mergers.”

The case could also mark a turning point for how regulators and the courts review proposed deals, at a time when US antitrust enforcers have intentionally brought difficult cases to test the law and to keep up with advances in technology.

Microsoft’s proposed deal would give it control over key video game franchises, including “Call of Duty,” “World of Warcraft” and more. That could give it enormous influence over the future of a multibillion-dollar industry, the FTC said.

The post FTC Sues to Block Microsoft’s $69 Billion Acquisition of Activision Blizzard was originally published on the CNN.