Editor’s note: This article has been updated.
The U.S. Federal Trade Commission (FTC) filed a lawsuit Thursday to halt Microsoft’s $69 billion acquisition of video game developer Activision Blizzard, which would be the largest acquisition in the video game industry’s history.
The FTC is alleging Microsoft could take advantage of its ownership of Activision Blizzard, creator of several of the world’s most popular video games including “Call of Duty” and “World of Warcraft,” by making players’ experience worse on rival consoles while granting exclusive content to its own Xbox console, according to press release. The regulator argued that Microsoft’s acquisition of ZeniMax, the parent company of popular video game developer Bethesda Softworks, ultimately resulted in several of Bethesda’s most prominent franchises and intellectual properties appearing exclusively on Microsoft’s platform. (RELATED: Dem Rep Demands Investigation Into FTX ‘Regulatory Failings’ After Raking In Donations From Its Disgraced Ex-CEO)
Despite the regulatory action, Activision Blizzard CEO Bobby Kotick struck an optimistic chord in an internal memo, obtained by the Daily Caller News Foundation.
“I wanted to provide a brief update on our pending deal with Microsoft,” Kotick wrote to staff. “This week the U.S. Federal Trade Commission (FTC) announced its decision to challenge the deal. This means they will file a lawsuit to block the merger, and arguments will be heard by a judge. 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.”
CEO of Facebook Mark Zuckerberg (L) talks to CEO of Activision Blizzard Bobby Kotick after a session at the Allen & Company Sun Valley Conference on July 08, 2021 in Sun Valley, Idaho. (Photo by Kevin Dietsch/Getty Images)
Vice chair and president of Microsoft Brad Smith also argued that the deal “will expand competition and create more opportunities for gamers and game developers,” according to The Verge. When the deal was initially announced, antitrust experts anticipated that it would pass the government’s investigations, but allegations of workplace misconduct at Activision Blizzard lead to pressure from progressive senators to crack down on the deal, according to The Wall Street Journal.
“Microsoft has already shown that it can and will withhold content from its gaming rivals,” Holly Vedova, Director of the FTC’s Bureau of Competition said in the press release. “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 FTC declined to comment beyond the press release and official complaint. Microsoft did not immediately respond to a Daily Caller News Foundation request for comment.
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