FTC Files an Antitrust Lawsuit Against Microsoft (UPDATED)

posted by Roy Schestowitz on Dec 09, 2022,
updated Dec 13, 2022

• FTC Sues To Block Microsoft’s Acquisition of Activision Blizzard To Prevent Competition Harms [Ed: This neglects to mention that Shiva Stella allowed Microsoft to infiltrate the Board of her organisation]

  Today, the Federal Trade Commission filed an antitrust lawsuit against Microsoft to block the company’s $69 billion acquisition of video game maker Activision Blizzard. The agency acted in order to prevent Microsoft from harming competition in the gaming marketplace, including consoles and subscription services.

  The suit follows a letter sent this year by Public Knowledge and other organizations encouraging the agency to “closely scrutinize” the buyout of a “structurally important gaming developer and publisher.” The complaint mirrors several of the issues raised in Public Knowledge’s March 2022 blog post about the transaction. Public Knowledge has cautioned that the merger raises serious competition issues and risks harming gamers and the gaming industry.

• FTC Looks To Block Microsoft Buy of Activision with Lawsuit

  The FTC announced that the $68.7 billion proposed acquisition, which, if finalized, would be the most expensive in U.S. history, would "suppress competitors," if Microsoft was to go ahead with the purchase.

  "With control over Activision's blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision's game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision's content, or withholding content from competitors entirely, resulting in harm to consumers," said the FTC in a statement announcing the lawsuit.

• FTC Sues to Block Microsoft’s $69 Billion Activision Blizzard Acquisition

  The FTC filed an antitrust lawsuit seeking to prevent Microsoft from acquiring Activision Blizzard, maker of video-game franchises including “Call of Duty,” “Overwatch” and “World of Warcraft,” alleging that it would let Microsoft “suppress competitors” in the sector.

  The proposed $69 billion deal, announced earlier this year, would be Microsoft’s biggest ever and the largest to date in the video-game. The Federal Trade Commission, in announcing the lawsuit, alleged that Activision Blizzard would let Microsoft “suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”

• FTC Sues to Block $69B Microsoft, Activision Merger

  The FTC said that the proposed transaction would enable Microsoft to stifle competition to Xbox and its “rapidly growing” game streaming service. It pointed to the tech giant’s history of acquiring competitors to “suppress competition from rival consoles,” including its purchase of ZeniMax, parent company of Bethesda Softworks and maker of The Elder Scrolls, Fallout and Starfield.

  “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.”

• FTC sues to block Microsoft’s acquisition of Activision

  The agency alleged Microsoft suppressed competition from rival consoles by acquiring companies in the past, including by deciding to make games like “Starfield” and “Redfall” exclusive to Microsoft devices after acquiring game developer ZeniMax.

  “Microsoft has already shown that it can and will withhold content from its gaming rivals,” the director of the FTC’s Bureau of Competition said in a statement. “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.”

UPDATE

Two more reports:

• The FTC is suing Microsoft to block its Activision Blizzard purchase - The Verge

  The FTC has sued Microsoft in an attempt to keep it from acquiring Activision Blizzard, owners of Call of Duty and King games. The Xbox owner was hoping to purchase the gaming titan for almost $69 billion.

• Advocates Applaud as FTC Sues to Stop Microsoft-Activsion Mega-Merger

  Consumer advocates cheered a lawsuit filed Thursday by the Biden administration in a bid to block the proposed merger of two of the world's leading video game companies, Microsoft and Activision Blizzard—a $69 billion deal the Federal Trade Commission argued would "harm competition" in the nearly $200 billion gaming industry.

  "Today's action is of incredible importance in ensuring fair and open competition in gaming and across the larger digital economy."

A couple more:

• FTC sues Microsoft to block Activision Blizzard deal - Polygon

  The U.S. Federal Trade Commission is suing Microsoft over its planned $68.7 billion acquisition of Activision Blizzard, saying that the deal “would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”

  In a news release, the FTC said that Microsoft has a record of “acquiring and using valuable gaming content to suppress competition from rival consoles,” pointing to the company’s $7.5 billion acquisition of ZeniMax Media, the parent company of Bethesda Softworks. The FTC noted Microsoft’s plan to keep next year’s Starfield from Bethesda Game Studios and Redfall from Arkane as Microsoft exclusives. Those games will be available on Xbox platforms and Windows PC, and the company’s Game Pass subscription service.

• FTC Sues Microsoft to Block $69B Activision Blizzard Acquisition

  We’ll see how it plays out, but my gut feeling is that this is a mistake on the FTC’s part. The video game industry is incredibly competitive today. Yes, Xbox and PlayStation are the only two high-end consoles, but the Switch is quite arguably Nintendo’s most successful platform ever. And it’s not like Sony is some shrinking violet and lacks for its own exclusive titles. Exclusive titles are a big part of competition. It’s also the case that the dominant players in console and PC gaming are not the dominant players in mobile gaming (Apple and Google). Let the market play this out, I say.

Update (by Rianne Schestowitz)

• Activision Blizzard: US seeks to block Microsoft's $69bn acquisition

  The US is entering a legal battle with Xbox-maker Microsoft to block its plan to purchase the gaming firm behind hit titles such as Call of Duty.

  Regulators cited competition concerns, saying they feared that if the deal went through, Activision Blizzard's games would stop being offered on non-Microsoft gaming consoles.

  The Activision purchase was set to be the biggest in Microsoft history.

  The company said it would fight to complete the $69bn (£56bn) deal.

One more:

• Federal Officials Sue to Stop Microsoft Merger in Major Antitrust Move

Newer report:

• Lina Khan, Aiming to Block Microsoft’s Activision Deal, Faces a Challenge

  The case is shaping up as a test of Ms. Khan’s belief that the F.T.C. must become more aggressive to check the power of corporate giants in the modern economy, including the biggest tech companies. Appointed to lead the agency by President Biden, she has signaled she wants to take more lawsuits to court — instead of settling with companies — to push the boundaries of antitrust law and return to the kind of trustbusting not seen since the last century.

Liam Dawe:

• Microsoft's acquisition of Activision Blizzard hits a bump as FTC seeks to block it

  Remember the big news back in January that Microsoft was acquiring Activision Blizzard? Well, the FTC aren't happy about it and are trying to block it.

Canadian press:

• U.S. regulator moves to block Microsoft's takeover of Activision Blizzard

  The FTC voted 3-1 to issue the complaint after a closed-door meeting, with the three Democratic commissioners voting in favour and the sole Republican voting against. A fifth seat on the panel is vacant after another Republican left earlier this year.

  The FTC's complaint points to Microsoft's previous game acquisitions, especially of well-known developer Bethesda Softworks and its parent company ZeniMax, as an example of where Microsoft made some popular game titles exclusive despite assuring European regulators it had no intention to do so.