Microsoft's Activision Blizzard acquisition is being blocked by the FTC

The FTC deems that the Xbox maker's acquisition of Activision Blizzard would harm competition with rival game consoles and negatively impact consumers.
Written by Sabrina Ortiz, Editor
microsoft logo on a phone against a backgrounf that reads activision blizzard
Getty Images/Anadolu Agency

The video game company Activision Blizzard is behind some of the most popular video games of our time, including the blockbuster Call of Duty franchise. In January, Microsoft announced plans to acquire the video game giant; however, the Federal Trade Commission (FTC) may get in the way. 

On Thursday, the FTC announced that it will be suing Microsoft, which makes the Xbox gaming console. The agency said Microsoft's $69 billion acquisition of Activision Blizzard would harm competition by potentially denying rival console makers' access to Activision Blizzard's massively popular content. 

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To support its case, the FTC said that Microsoft has a record of acquiring gaming content, such as ZeniMax's, and using it to suppress competition from rival gaming consoles. 

"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."

Activision Blizzard's popular video game titles, which also include Overwatch, World of Warcraft, Overwatch, Candy Crush and Diablo, garner over 154 million monthly active users around the world, according to the FTC. All of these video games are currently available to the public regardless of gaming console. If Microsoft did acquire it, there is the potential that many of those users would no longer have access to it. 

"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.

Microsoft said on Thursday it was prepared to defend itself in court against the FTC's claims.

"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 sent to ZDNET. "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."

Recent times have shown the possible negative effects of a major acquisitions. The 2010 Ticketmaster and LiveNation merger, which basically gave Ticketmaster a monopoly over the ticket-buying industry, caused outrage last month when fans were unable to purchase Taylor Swift tickets from Ticketmaster and had nowhere else to turn for tickets.  

When Microsoft initially announced its acquisition plans, it said the acquisition was meant to make gaming more accessible to everyone, bringing "the joy and community of gaming to everyone, across every device". 

"Players everywhere love Activision Blizzard games, and we believe the creative teams have their best work in front of them," Microsoft Gaming CEO Phil Spencer said at the time. "Together we will build a future where people can play the games they want, virtually anywhere they want."

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