Microsoft’s Activision Blizzard acquisition to be reviewed by FTC

Microsoft’s massive deal to acquire Activision Blizzard could face a difficult review process. According to Bloomberg, the Federal Trade Commission will be reviewing the deal rather than the Justice Department.

Microsoft anticipates that the deal will close before fiscal Q4 2023. This deal will allow Microsoft to take control of key franchises such as Overwatch, Warcraft and Starcraft. Microsoft has stated that it plans to keep releasing many of these games on Sony’s PlayStation platform, at least as long as current contract agreements are in place, but the potential remains for Xbox to shut its competitor out of some of the biggest franchises in the world should the deal go through.

Although both these US regulatory agencies are responsible for reviewing acquisitions they can only take one, which in this instance will be Lina Khan’s FTC. Khan was vocal about her objection to potential monopolies. Both the Justice Department as well the FTC promised that they would be more harsh on large tech.

Microsoft closed a similar, but smaller, deal to acquire Bethesda early last year, but that deal’s process started under the previous administration’s regulatory bodies and concluded before Khan and her stricter stance arrived at the FTC.

Microsoft’s deal isn’t the only gaming acquisition announcement in the last couple of weeks either. On Monday, Sony announced that it is acquiring Bungie, the studio behind Destiny, in a $3.6 billion deal that will be subject to government approval — though the process is likely to be a little less complicated because the deal is so much smaller.

Large-scale acquisitions of this type have typically been safe on the entertainment side, with moves like Discovery’s acquisition of Warner Media expected to go through, but Microsoft’s involvement, and the frequent use of terms like metaverse, could turn this into a tech issue, which could prompt closer scrutiny from Khan’s FTC.

While all of these factors are likely to make the acquisition more difficult and questionable for Microsoft, we likely won’t know whether or not the Activision Blizzard deal will go through until several months from now, if not next year.