The FTC filed an antitrust lawsuit seeking to prevent Microsoft from acquiring Activision Blizzard, maker of video-game franchises “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.”
“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,” the FTC said in announcing the lawsuit.
Microsoft did not immediately comment on the FTC action.
In the lawsuit, the FTC pointed to Microsoft’s “record of acquiring and using valuable gaming content” to thwart competition from rival consoles. According to the agency, that has included its $7.5 billion acquisition of ZeniMax, parent company of game developer Bethesda Softworks. In that case, 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.”
“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 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.”
The FTC vote to sue Microsoft over the deal was 3-1, with commissioner Christine Wilson, who was appointed to the agency by Donald Trump, voting “no.”