The US Federal Trade Commission is suing to block Microsoft’s $69 billion deal to buy Activision Blizzard on antitrust grounds.
The FTC’s main concern is that Microsoft would "deny or degrade" Activision Blizzard games from appearing on rival platforms, which would hurt consumers.
“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,” the FTC says.
Following a 3-1 vote, the commission filed a lawsuit on Thursday to stop the proposed merger, even as Microsoft has repeatedly pledged it’ll keep Activision’s cornerstone franchise Call of Duty on other platforms, including Sony's PlayStation. Earlier this week, Microsoft even entered into a 10-year agreement to bring Call of Duty to Nintendo’s consoles.
However, the FTC argues Microsoft already has a record of “using valuable gaming content to suppress competition from rival consoles.” As evidence, the commission pointed to Microsoft’s earlier acquisition of Zenimax and Bethesda.
“Microsoft decided to make several of Bethesda's titles, including Starfield and Redfall, Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles,” the FTC says.
Microsoft plans on fighting the US regulator in court. “We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers,” Microsoft President Brad Smith said in a statement. “We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC.”
Smith added: "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.” Nevertheless, Microsoft could face resistance from other government regulators including the EU, which is also reportedly gearing up to investigate the proposed deal.