FTC likely to file suit to block Microsoft’s $69bn Activision deal -Politico

The Federal Trade Commission of the United States is likely to challenge Microsoft’s $69 billion Activision acquisition by filing an antitrust lawsuit, Politico reported on Wednesday citing claims of three sources familiar with the matter. (via Reuters)

According to the report, while a lawsuit is not guaranteed and four commissioners of the FTC have not yet voted on a complaint or met with the companies’ attorneys, members of the FTC who are scrutinizing the acquisition have some doubts about the companies’ arguments, sources said.

“We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but won’t hesitate to fight to defend the transaction if required,” a spokesperson for Activision Blizzard said. 

“Any suggestion that the transaction could lead to anticompetitive effects is completely absurd. This merger will benefit gamers and the U.S. gaming industry, especially as we face increasingly stiff competition from abroad,” the spokesperson added.

The report comes weeks after the European Commission opened an in-depth antitrust investigation into the deal over concerns that it could significantly harm competition and limit access to Activision’s popular games like Call of Duty.

The UK’s Competition and Market Authority (CMA) also launched an investigation into the acquisition in July, and entered the second phase of its review in September, saying that it ‘’could substantially lessen competition in gaming consoles, multi-game subscription services, and cloud gaming services.’’

The proposed acquisition, which has been approved by Saudi Arabia and Brazil, also has come under fire by Sony, which argues that it could enable Microsoft to prevent Call of Duty from being added to PlayStation and PlayStation Plus.

“Sony, as the industry leader, says it is worried about ‘Call of Duty,’ but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation,” said Brad Smith, Microsoft President and Vice Chair.

“We are prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence,’’ said David Cuddy, General Manager of Public Affairs at Microsoft. ‘’We’ll still trail Sony and Tencent in the market after the deal closes, and together Activision and Xbox will benefit gamers and developers and make the industry more competitive.“

In its filings as part of the CMA investigation, Microsoft said last month that it plans to build an Xbox mobile game store to rival Apple and Google, where it wants to offer popular Activision Blizzard titles like Candy Crush Saga and Call of Duty: Mobile.

Meanwhile, Fortnite-maker Epic Games recently said in a court filing in its lawsuit against Google that the Android-maker paid Activision $360M not to launch a rival app store. Activision rejected the claims, calling them ‘’nonsense’’.