The U.S. Federal Trade Commission (FTC) has sought a preliminary injunction to temporarily halt Microsoft’s acquisition of video game giant Activision Blizzard, Reuters reported. The five-day evidentiary hearing aims to determine if the proposed $69 billion merger would harm competition within the gaming industry.
According to Reuters, FTC’s lawyer James Weingarten argued that if the deal goes through, the combined company would possess the ability and incentive to negatively impact competition across various markets related to gaming consoles, subscription services, and cloud gaming. The FTC is seeking a court ruling before the merger can proceed.
One of the primary concerns raised by the FTC is the potential exclusivity of Activision games to Microsoft’s Xbox console, leaving competitors such as Nintendo and Sony’s PlayStation at a disadvantage. Microsoft lawyer Beth Wilkinson countered this argument, stating that it would make strategic sense for Xbox to make Activision games available across multiple platforms. She warned that granting the injunction would lead to a protracted three-year administrative proceeding, jeopardizing the entire deal.
Scheduled to testify during the hearing are notable figures from both Microsoft and Activision, including Microsoft Gaming CEO Phil Spencer, senior Microsoft finance director Jamie Lawver, former Google Stadia cloud gaming service director Dov Zimring, and Sony Interactive Entertainment CEO Jim Ryan, who will appear via video deposition.
Resolving the U.S. lawsuit is a critical step in finalizing the deal between Microsoft and Activision as they continue to face other antitrust battles around the world. While the European Union approved Microsoft’s bid to acquire Activision in May, British competition authorities blocked the takeover in April.
The FTC argues that this potential acquisition, which would be the largest for Microsoft and the largest in the history of the gaming industry, could grant Microsoft the power to restrict or degrade Activision’s content in ways that significantly diminish competition.
Microsoft, on the other hand, maintains that the merger would benefit gamers and gaming companies alike. As a gesture of goodwill, the company has offered to sign a legally binding consent decree with the FTC, ensuring that “Call of Duty” games would be accessible to rival companies for a period of ten years.
The hearing is scheduled to continue until June 29, with testimonies from key witnesses such as Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick set for the following week.
(With Inputs from Reuters)
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