FTC asks federal court to block Microsoft’s Activision acquisition

In a federal court on Thursday, the Federal Trade Commission of the United States argued for a preliminary injunction aimed at blocking Microsoft’s proposed acquisition of Activision Blizzard for $69 billion, as reported by Reuters.

During the opening arguments of a five-day evidentiary hearing that began on Thursday, nearly ten days after the FTC filed an injunction to block the deal, the government agency’s lawyer James Weingarten said that ‘’if this deal is completed, the combined company … is likely to have the ability, an incentive, to harm competition in various markets related to consoles, subscription services and the cloud (for gaming)“.

The Commission is asking the court to block the tech giant and the video game company from finalizing the deal until it decides if it would harm competition in the gaming industry or not. It argues that the merger would give Microsoft an exclusive access to Activision titles, potentially leaving Nintendo and Sony’s PlayStation consoles at a disadvantage.

Microsoft, on the other hand, argues that the acquisition, which would be the biggest gaming deal ever if it goes through, would bring advantages to both gamers and other gaming companies. The company has also proposed signing a legally binding consent decree with the Federal Trade Commission to make Call of Duty titles available on rival platforms for a decade.

During the opening arguments, Microsoft lawyer Beth Wilkinson said: “I think you will see that every piece of evidence shows that it only makes sense for Xbox to make these Activision games available to as many people on as many platforms as possible.” 

She also argued that if the court grants an injunction, it would lead to a three-year administrative proceeding that could eventually kill the acquisition.

While Microsoft and Activision Blizzard recently received their approval for the deal from the European Commission, the UK’s Competition and Markets Authority (CMA) also blocked the deal in late April saying that Microsoft failed to address its cloud-gaming related competition concerns.