Following Gov’t Action, Gamers Seek to Halt Microsoft’s Acquisition of Activision Blizzard

Gamers from three states have sued Microsoft Corporation in an attempt to halt its $68.7 billion acquisition of video game developer and distributor Activision Blizzard. The San Francisco, Calif. federal lawsuit asserts that the merger violates provisions of the Clayton Act by substantially lessening competition and tending to create a monopoly in various video game-related markets.

According to the filing, the companies compete in video game development, publishing, and distribution. Microsoft also makes the Xbox gaming console, the PC operating system Windows, and owns the cloud-computing service Azure on which it runs its cloud-gaming services.

“If Microsoft’s proposed acquisition of Activision Blizzard is allowed to proceed, the video game industry may lose substantial competition, and Microsoft may have far-outsized market power, with the ability to foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition,” the suit says.

The private action follows decisions by the European Commission (EC), Europe’s antitrust watchdog, and the Federal Trade Commission (FTC) to block the deal. For the EC’s part, the agency cited concern over Microsoft foreclosing access to high profile games like ‘Call of Duty’ or limiting rival console makers from distributing such games.

The FTC voiced similar concerns in its administrative lawsuit against Microsoft, including harm to competitors of Microsoft’s Xbox gaming console and the perilous acceleration of the growth of Microsoft’s already booming subscription content and cloud-gaming business.

Like those governmental bodies, this week’s suit says the potential acquisition threatens the plaintiffs and the public at large, citing the loss of “the salutary benefits of substantial competition within the video game industry.” The complaint adds that enforcement of the antitrust laws by private citizens is part of Congress’s intended plan to ensure that competition rather than monopoly rule trade in the United States.

The plaintiffs ask for declaratory and injunctive relief halting the merger as well as their costs and attorneys’ fees. They are represented by Alioto Law Firm and Joseph Saveri Law Firm LLP.