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Saturday, June 22, 2024
Law

FTC Says Microsoft’s $69B Activision Blizzard Deal Would ‘Harm Competition’

  • The biggest gaming deal in history is on thin ice.
  • The deal will be decided on in court after the Federal Trade Commission sued to block Microsoft's $69 billion acquisition.
Activision Blizzard makes games like Call of Duty and was acquired by Microsoft.
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The biggest deal in gaming history was dealt a major blow on Thursday.

The Federal Trade Commission sued to block Microsoft’s $69 billion acquisition of Activision Blizzard, saying the sale would give the tech giant ​​“both the means and motive to harm competition.”

  • The regulator raised concerns about Microsoft raising prices, directing gamers to purchase its platforms — namely Xbox and Windows — and holding undue sway over the cloud gaming sector.
  • The FTC cited Microsoft’s 2021 acquisition of Bethesda parent ZeniMax Media, noting that the tech giant assured European regulators that games would continue to be available on competitors’ platforms but made several exclusive anyway.
  • Activision Blizzard owns many of the most popular gaming franchises, including “Call of Duty” and “World of Warcraft.”

The deal is also under regulatory scrutiny in the U.K., the European Union, and Australia. 

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Far From Dead

“We have been committed since Day 1 to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC,” said Microsoft president Brad Smith, adding “we have complete confidence in our case and welcome the opportunity to present our case in court.”

Microsoft and Activision Blizzard sought to preempt regulators’ concerns with a string of deals, including one announced earlier this week to bring “Call of Duty” to Nintendo.

While Activision’s stock dropped 1.5% on Thursday, its price, which has hovered between $72 and $77, already hinted at skepticism that Microsoft’s $95-per-share offer would be completed. Microsoft’s stock rose 1.2%.

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