FTC Acts to Block Microsoft’s Acquisition of Activision Blizzard

An administrative complaint filed by the Federal Trade Commission (FTC) on Thursday seeks to block technology titan Microsoft from acquiring video game developer Activision Blizzard Inc. (Blizzard) in the $69 billion deal, the largest ever in the video gaming industry. The FTC voted 3-1 to issue the complaint, with Commission Christine S. Wilson voting no. 

The action follows the European Commission’s bid to block the merger last month.

According to the FTC, the deal would harm competitors of Microsoft’s Xbox gaming console and would dangerously accelerate the growth of Microsoft’s already booming subscription content and cloud-gaming business. The FTC said that Blizzard is one of a very small number of top video game developers in the world that makes and sells high-quality games for multiple devices, including video game consoles, PCs, and mobile devices, with high-profile titles including Call of Duty, World of Warcraft, Diablo, and Overwatch.

In contrast to Blizzard’s current strategy of offering its games on many devices regardless of producer, the FTC fears that the acquisition will enable Microsoft to harm competition by manipulating game pricing, degrading game quality or player experience on rival consoles, changing the terms and timing of access to Blizzard’s content, or withholding content from competitors entirely, resulting in harm to consumers.

The complaint also pointed to Microsoft’s history of acquiring gaming franchises such as Bethesda Softworks. Troublingly, the agency said, Microsoft made several Bethesda titles, including Starfield and Redfall, exclusive to Microsoft consoles despite guaranteeing the European antitrust authorities that it had no incentive to restrict gaming access.

“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 commented 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.”