FTC Sues Microsoft to Block Activision Blizzard Acquisition

2023-06-13 18:47

The Federal Trade Commission (FTC) is suing Microsoft in order to block its $68.7 billion

The Federal Trade Commission (FTC) is suing Microsoft in order to block its $68.7 billion acquisition of Activision Blizzard.

As AP reports, a temporary restraining order and injunction were filed by the FTC against Microsoft in a San Francisco federal court yesterday. It's the second time the FTC has taken legal action to block the deal, with the first being through an in-house administrative law judge last year.

The FTC decided to block Microsoft's acquisition because it views the deal as detrimental to consumer choice and competition in the market. As to why a restraining order has also been requested the FTC explained in a statement,

"Microsoft and Activision Blizzard have represented in the past that they cannot close their deal due to antitrust reviews of the transaction in other jurisdictions ... But Microsoft and Activision have not provided assurances that they will maintain that position. In light of that, and public reporting that Microsoft and Activision Blizzard are considering closing their deal imminently, we have filed a request for a temporary restraining order to prevent them from closing while review continues."

In response, Microsoft president Brad Smith said, "We welcome the opportunity to present our case in federal court ... We believe accelerating the legal process in the U.S will ultimately bring more choice and competition to the market." Activision CEO Bobby Kotick has told employees this is a "positive development" because it should speed up the process of completing the deal.

Back in April, the UK’s Competition and Markets Authority (CMA) decided to block the deal because it found Microsoft already controls an estimated 60-70% of global cloud gaming services. The acquisition would therefore reinforce Microsoft’s advantage in the market and limit Activision's games appearing on multiple other cloud platforms, according to the CMA.

Microsoft has vowed to fight on and will appeal the CMA's decision while also now turning its attention to the FTC's federal case. Meanwhile, Microsoft's Xbox division has been busy showcasing new games, revealing an upgraded Xbox Series S console, and suggesting we shouldn't hold our breath for a more powerful Xbox console.

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