FTC sues Microsoft to block Activision Blizzard deal

The U.S. Federal Trade Commission is suing Microsoft over its planned $68.7 billion acquisition of Activision Blizzard, saying that the deal “would enable Microsoft to suppress competitors to its Xbox gaming consoles its rapidly growing subscription content and cloud-gaming business.”

In a news release, the FTC said that Microsoft has a record of “acquiring and using valuable gaming content to suppress competition from rival consoles,” pointing to the company’s $7.5 billion acquisition of ZeniMax Media, the parent company of Bethesda Softworks. The FTC noted Microsoft’s plan to keep next year’s Starfield and RedfallThese games are exclusive to Microsoft. The games will be compatible with both Xbox and Windows PC platforms.

“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, in a news 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 points to the Xbox Series S and Series X as “one of only two types of high performance video game consoles” on the market — the other, Sony’s PlayStation 5, is not mentioned in its statement. The commission also points to Microsoft’s Game Pass service as another cornerstone of the company’s gaming business, for which Sony and other console competitors do not have an equivalent.

The commission also notes that Activision Blizzard is “one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices.” The publisher controls a wide number of properties, including Call of Duty, Warcraft, Overwatch, and Diablo.

“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.

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