FTC action might prevent Microsoft’s Activision deal
The acquisition of Activision Blizzard, a video game publisher, by Microsoft allegedly faces a major barrier as soon as next month.
Politico reports, citing sources in the know, that the United States Federal Trade Commission (FTC) is planning to bring an antitrust action to stop the $69 billion merger.
The four commissioners of the FTC have not yet voted out a complaint or spoken with counsel for the corporations, so a lawsuit contesting the deal is not a sure thing.
It has been reported that the FTC employees reviewing the agreement are sceptical of the corporations’ reasons.
Microsoft’s potential advantage in the video game market is at the heart of the FTC’s worries regarding the proposed acquisition of Activision.
If you compare Microsoft’s Xbox to the market leader, Sony Interactive Entertainment’s PlayStation, you’ll see that it comes in at number three.
Sony is concerned that it will be at a considerable disadvantage versus Microsoft if it makes popular titles like Call of Duty exclusive to its platforms.
“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,” Joe Christinat, a representative for Activision, recently spoke with Politico.
Activision Blizzard Inc. shares dropped by approximately 4 percent during after-hours trading.
The acquisition, which was revealed by Microsoft in January, was the largest in the game industry’s history.
David Cuddy, a spokeswoman for Microsoft, told Politico that the firm “is prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence. 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.”
This month, the EU launched a comprehensive probe. The EU agency charged with enforcing competition laws has stated that a decision on whether to approve or ban the merger would be made by March 23, 2023.