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Monday, Jan 30, 2023

The FTC is suing to block Microsoft's $68.7 billion purchase of Activision Blizzard

The FTC is suing to block Microsoft's $68.7 billion purchase of Activision Blizzard

Responding to the FTC's legal challenge, Activision Blizzard CEO Bobby Kotick said calling the deal anti-competitive "doesn't align with the facts."
The Federal Trade Commission is suing to stop Microsoft from buying Activision Blizzard.

The agency issued a complaint Thursday seeking to block the acquisition, saying the deal "would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business." 

The $68.7 billion deal is Microsoft's largest, not to mention the biggest in the video game industry.

"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 press 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."

Microsoft president and vice chair Brad Smith addressed the FTC's legal challenge in a tweet shortly after it was announced.

"We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers," he said. "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."

Activision Blizzard has 154 million monthly active users worldwide, according to the FTC. It's known for blockbuster franchises like Call of Duty and World of Warcraft.

The FTC's complaint highlighted Microsoft's history of gaming acquisitions, including its purchase of ZeniMax, saying Microsoft made titles like "Starfield" exclusive to Xbox after purchasing other gaming companies and assuring European antitrust regulators that it had no incentive to lock games to the console.

Shortly after the companies announced the deal in January, Smith and Xbox head Phil Spencer both vowed Call of Duty wouldn't leave PlayStation as a result of the deal.

In a letter to employees Thursday, Activision Blizzard CEO Bobby Kotick reiterated his "confidence" that the deal will go through.

"The allegation that this deal is anti-competitive doesn't align with the facts, and we believe we'll win this challenge," Kotick wrote. "The competitive landscape is shifting, and, simply put, a combined Microsoft-ABK will be good for players, good for employees, good for competition and good for the industry. Our players want choice, and this gives them exactly that."
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