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The Joe Biden administration filed a complaint to block technology giant Microsoft’s bid to buy Activision, the maker of ‘Call of Duty’, fearing the deal would prevent rivals from accessing the most popular games.
The Federal Trade Commission (FTC) filed a lawsuit on Thursday to block Microsoft’s $69 billion acquisition of video game company Activision Blizzard, alleging it could hurt other industry competitors.
The FTC’s appeal is a test for the Biden administration to scrutinize big tech companies. Following a closed-door meeting, the Commission voted 3-1 in favor of the complaint, with all three Democratic commissioners voting in favor and the lone Republican voting against.
The complaint points to previous Microsoft acquisitions of game makers, especially well-known developer Bethesda Softworks and its parent company ZeniMax, an example to the FTC of Microsoft making some upcoming game titles exclusive to Xbox, despite the promise not to.
“Microsoft has already shown that it can and will retain content from its rivals in the gaming industry,” said Holly Vedova, director of the FTC’s Office of Competition. “Today we want to prevent Microsoft from taking control of a major independent gaming studio and use it to undermine competition in multiple fast-growing and dynamic gaming markets,” he added.
We continue to believe that our deal to acquire Activision Blizzard will expand competition and create more opportunities for gamers and game developers.
—Brad Smith (@BradSmi) December 8, 2022
The FTC filed the complaint through its administrative process instead of taking the case to federal court. According to the complaint, a contentious-administrative judge will hear the evidence, but until August 2023.
Brad Smith, Microsoft’s chairman, said in a statement that the company is likely to challenge the FTC’s action. “Although we believed that peace should be given a chance, we have full confidence in our case and welcome the opportunity to bring it to court,” he said.
The company has stepped up its public defense of the deal in recent days pending a decision. Smith said Microsoft submitted concession proposals to the FTC earlier this week. “We continue to believe that this agreement will broaden competition and create more opportunities for players and game developers,” Smith said.
Microsoft announced the merger in January but has faced months of resistance from Sony, which makes the PlayStation and complains to antitrust agencies that other competitors could lose access to “Call of Duty” or other popular Activision-owned games. .
Microsoft promised that it would make ‘Call of Duty’ available on Nintendo devices for 10 years if its acquisition went ahead and offered the same to Sony. In late November, Microsoft was expected to offer solutions to EU antitrust regulators to avoid formal objections to the deal, according to sources close to the matter. The European Commission has until January to submit a formal list of competition concerns, known as a statement of objection.
with PA
