Xbox Being Sued by FTC Over Activision Blizzard Acquisition

UPDATE: Microsoft has issued a statement regarding the FTC's decision to The Verge: "We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers," Brad Smith, Microsoft's vice chair and president, said in a statement to The Verge. "We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court."

Activision's EVP Corporate Affairs and CCO Lulu Cheng Meservey also commented on the matter on Twitter: "The FTC's job is to protect consumers, not competitors. This vote departs from precedent but the law hasn't changed. Any claim the deal is anticompetitive ignores facts; the deal benefits gamers and the industry, especially given competition from abroad. We look forward to proving our case in court and closing our deal with Microsoft"

The original story continues below.

The FTC, one of the biggest government agencies in the United States, is suing Microsoft in an effort to block the tech giant's acquisition of Activision. Earlier this year, Microsoft announced its intent to purchase Call of Duty publisher Activision for just shy of $70 billion, making it the biggest gaming acquisition of all-time. Given Activision holds the keys to a lot of major franchises, including one that is consistently the biggest seller almost every single year, this drew a lot of criticism and pushback. Regulators, competitors, and even players themselves have been voicing their concern over one platform becoming the owner of a franchise like Call of Duty, as it could lead it to it becoming exclusive to Xbox. Xbox itself has stated it plans to treat the series like Minecraft, meaning it will be available on all other platforms. To prove this, Microsoft even made a deal with Nintendo and Valve to guarantee Call of Duty games on those systems for a decade with plans to continue beyond that. A similar offer was made to PlayStation, but it doesn't seem the company accepted it.

Although some regulators have approved the deal, the FTC has been in doubt. There were rumblings that the agency was going to make an effort to block the deal and now, it's happening. The FTC has officially confirmed that it will be suing Microsoft for the major deal in an attempt to block the deal from completing, stating that the acquisition would "enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business." The FTC also claimed that Microsoft's acquisition of Zenimax and the subsequent exclusivity of games like Starfield has shown that it would "withhold content" from other platforms.

"Microsoft has already shown that it can and will withhold content from its gaming rivals," said Holly Vedova, Director of the FTC's Bureau of Competition. "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."  

As of right now, it remains to see what will come of this. This doesn't mean that the deal is automatically dead in the water as other companies have successfully evaded these lawsuits in the past. Prior to this lawsuit, the deal was intended to be completed by June 2023, though that seems more uncertain now. 

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