July 15, 2024

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Technological development

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

FTC Sues to Block Microsoft’s  Billion Acquisition of Activision

The deal between Microsoft and Activision has been under review by 16 regulators around the world, but the F.T.C. is the first of three key regulators, including in Britain and the European Union, to reach a decision on the acquisition.

Microsoft has argued that the deal benefits consumers because Microsoft could make Activision’s broad library of games available to more people on different platforms and as part of a bundled subscription to Xbox Game Pass, its Netflix-like streaming offering, instead of downloading and buying each game individually.

But the F.T.C. said customers would be harmed because Microsoft could misuse Activision’s hugely popular games to its advantage, by withholding them from competitors like Sony or leveraging them to get an upper hand as more gaming is streamed online by harnessing the power of Microsoft’s data centers.

Legal experts said the case could be challenging for the F.T.C. to win because Microsoft and Activision do not really play in the same industry, reducing potential monopoly concerns. But the F.T.C. may be trying to pressure European regulators to step up, while making it more difficult for the companies to complete their deal.

The lawsuit follows a final scramble by Microsoft to assuage regulators’ concerns.

In mid-November, Microsoft offered Call of Duty to Sony for 10 years, significantly longer than in a previous offer. On Monday, Mr. Smith, Microsoft’s president who leads its lobbying operations, said in a Wall Street Journal opinion piece that the company was “open to providing the same commitment to other platforms and making it legally enforceable by regulators in the U.S., U.K. and European Union.”

Late Tuesday night, in an announcement intended to placate regulators, Microsoft said it reached a deal to bring the Call of Duty franchise to Nintendo’s Switch devices — where the games currently are not available — for 10 years if the Activision deal closes.

Microsoft has also gone on the offensive against Sony, which emerged in recent months as the primary opponent of the Activision deal. Sony, which makes the popular video game console PlayStation, told British regulators that the acquisition would put crucial games “under Microsoft’s sole control, giving it an unprecedented content advantage,” and that Microsoft had not offered to make Call of Duty available on Sony’s game streaming service.