On Thursday, the FTC stated that it plans to file a lawsuit against Microsoft in an attempt to stop the company from acquiring gaming corporation Activision Blizzard. In January, Microsoft proposed buying the said company for $68.7 billion; however, this decision has been met with harsh criticism due to past sexual harassment and discrimination allegations as well as recent labor disputes within the organization.
This deal would have a huge impact on the gaming industry – Activision Blizzard owns some of the most popular games out there, like Call of Duty and World of Warcraft. However, because it is such a big deal and there is currently a lot of anti-consolidation sentiment, it was always going to come under close scrutiny from regulators.
The FTC’s statement mentioned that it was worried the deal would allow Microsoft to control its competitors, limiting choices for Xbox users. This includes services like Game Pass and cloud gaming. Holly Vedova, Director of the Federal Trade Commission’s Bureau of Competition said-
“Microsoft has already shown that it can and will withhold content from its gaming rivals. Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”
The proposed merger between Microsoft and PlayStation maker Sony would consolidate some of the world’s most popular games under the Xbox’s banner, an idea to which Sony has loudly objected.
To stop possible regulation, Microsoft has promised to give the same Call of Duty treatment to PlayStation and even Nintendo if the deal is approved.
On Thursday afternoon, Activision Blizzard CEO Bobby Kotick explained to employees that even though the FTC pushback was happening, the deal would still go as planned. He also added-
“This sounds alarming, so I want to reinforce my confidence that this deal will close. The allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge.”
President Brad Smith of Microsoft also commented on the FTC’s ruling, stating that merged companies would have more opportunities to succeed than if they remained separate. He tweeted about this saying-
“We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believe in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present it in court. We continue to believe that our deal to acquire Activision Blizzard will expand competition and create more opportunities for gamers and game developers.”
Shivendra Tiwari is an Engineer and an MBA in Marketing. He is the Content head at Marketing91 and a thorough Online Marketing enthusiast. Shivendra loves to follow different brands and study their Business and Marketing tactics.