Microsoft's $69 billion Activision Blizzard takeover might be blocked by the FTC
The Federal Trade Commission will reportedly block Microsoft's Activision Blizzard acquisition, according to several sources
➡️ The Shortcut Skinny: Activision deal blocked
✋ The FTC (Federal Trade Commission) could block Microsoft’s pending $69bn Activision Blizzard takeover
👩⚖️ Sources say the FTC may file an antitrust lawsuit to stop the $69bn deal
✅ The lawsuit would need to be approved by the FTC’s four commissioners
😥 The FTC is worried that the deal could give Microsoft an unfair competitive advantage
Microsoft’s $69 billion Activision Blizzard deal has potentially hit another snag, as reports have emerged that the FTC could move to block the high-profile acquisition.
According to Politico, “three people with knowledge of the matter” believe that the Federal Trade Commission will file an antitrust lawsuit in an attempt to scupper the deal that Sony really doesn’t want to happen.
However, a lawsuit is not guaranteed. Four of the FTC’s commissioners would need to vote on filing a complaint, and the commissioners haven’t even met the lawyers of Microsoft and Activision Blizzard at this time. The lawsuit rumor comes from some FTC staff reviewing the deal, who believe that Microsoft’s arguments for why the takeover should go through won’t appease the Federal Trade Commission’s concerns.
The FTC declined to answer Politico’s request for comment.
Like other competition regulators, the FTC is worried that if the deal does go through, Microsoft would gain an unfair competitive advantage over Sony. Sony fears Microsoft would make Call of Duty exclusive, something which Xbox boss Phil Spencer has vehemently denied.
Joe Christinat, an Activision spokesperson, also said: “Any suggestion that the transaction could lead to anticomp effects is completely absurd. This merger will benefit gamers and the US gaming industry, especially as we face increasingly stiff competition from abroad. We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but will not hesitate to fight to defend the transaction if required.”
Microsoft and Activision Blizzard are still confident the deal will go through and it’s already been given the green light by Saudi Arabia and Brazil. But it continues to be a contentious issue elsewhere like the UK and the EU.
At times, the arguments between Sony and Microsoft have gotten ugly, albeit a surprising source of new information. It’s come to light that both Sony and Microsoft don’t expect the PS6 or the next Xbox to arrive before 2028, which means we’ll have plenty of time to enjoy the best PS5 games and best Xbox Series X games before the next generation of consoles arrive.
In a response to the UK’s Competition and Markets Authority (CMA) statement, Sony recently expressed more concerns about how Microsoft could take advantage of the Activision Blizzard deal.
As reported by VGC, Sony argues that, “Faced with weaker competition, Microsoft would be able to: increase console and game prices for Xbox users (including those that switched from PlayStation); increase the price of Game Pass; and reduce innovation and quality.”
Sony’s statement is an ironic one, considering that Sony, the market leader, has already done everything it fears Microsoft could do were it to takeover Activision Blizzard.
Microsoft expects the Activision Blizzard deal to close sometime in March 2023, but if the FTC does indeed get involved, that deadline could be affected. We’ll have to wait and see what other twists arise during Microsoft’s record-breaking acquisition, but if all goes well, we should see the likes of Call of Duty, Diablo and more on Xbox Game Pass in the future.
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Words to avoid as a spokesperson for a company at the center of a major acquisition under global regulatory attention: calling the argument against the deal 'absurd'. Using a pejorative cedes the high-ground of fairness and transparency in an instant -- no matter how hard the other side is blotting their copybook.