Chalk up yet another hurdle for Microsoft in the way of its $68B bid to purchase Activision Blizzard as the US Federal Trade and Commision agency has filed a legal challenge against the deal.
Microsoft and the FTC have been going back and forth for weeks over the proposed Activision deal resulting in a see-saw of news headlines predicting both positive and negative resolutions to their meetings. However, today the Federal Trade Commission decided on what it believes is a positive outcome for consumers and ultimately a negative result for Microsoft by filing a suit to block a deal between Activision Blizzard and Microsoft.
According to the FTC’s press release, the reason the voting block of commissioners decided on a 3 to 1 decision against the deal had to do with Microsoft willingness to “withhold content from its gaming rivals.”
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 cites Microsoft’s decision to make titles from its recently approved acquisition of Bethesda which it made Starfield and Redfall exclusives despite “assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles,” as cause for its suit.
The FTC makes a compelling opening argument using Starfield and Redfall as a precedent, but both titles were original IP from a studio Microsoft purchased. As for Activision Blizzard, the studio/publisher’s main IPs are already under contract, contracts and terms that Microsoft has extended and offered to previously excluded platforms as well, over the past couple of days.
Microsoft’s vice chair and president Brad Smith offered the following statement to The Verge after the FTC’s decision went public, “We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers. We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. 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.”
With both Nintendo and Valve lined up to benefit from Microsoft’s purchase of Activision Blizzard that would result in a 10-year deal to democratize the publisher’s biggest title-to-date, Microsoft has preemptively begun chipping away at the FTC’s case.