While it hasn’t been particularly smooth sailing so far for the Microsoft/Xbox – Activision Blizzard merger, things could get a lot more challenging soon. According to a report by Politico, the Federal Trade Commission (FTC) could be looking to file an antitrust lawsuit to block Microsoft’s $69 billion takeover of Activision Blizzard.
While regulatory bodies across the globe have been scrutinizing this merger, Xbox/Microsoft has yet to hit a major roadblock. The most major of roadblocks could be headed their way in the form of the FTC. A lawsuit challenging the merger has not yet been confirmed, but Politico reports that the FTC staff is reviewing the deal and are skeptical of the companies’ arguments.
This is a massive deal for Microsoft as their $69 billion could fall apart under the weight of FTC’s antitrust lawsuit challenge. Microsoft faced similar antitrust issues over 2 decades ago, and a second challenge on a scale such as this does not bode well for the company.
Microsoft – Activision Blizzard $69 Billion Merger Catches the FTC’s Attention
If FTC were to challenge this merger, it would be the biggest antitrust lawsuit challenge filled under Chair Lina Khan.
“Central to the FTC’s concerns is whether acquiring Activision would give Microsoft an unfair boost in the video game market,” reads the Politico report. “Microsoft’s Xbox is number three to the industry-leading Sony Interactive Entertainment and its PlayStation console. Sony, however, has emerged as the deal’s primary opponent, telling the FTC and regulators in other countries that if Microsoft made hit games like Call of Duty exclusive to its platforms Sony would be significantly disadvantaged.”
Xbox has put out an official statement that essentially leveled accusations against Sony for making self-serving statements in a bid to maintain its market-leader position in gaming. Much of the conflict between Sony and Microsoft stems from the latter gaining control of the Call of Duty franchise and locking it to their platform. Xbox CEO Phil Spencer has made statements in public that suggests the COD franchise will remain on PlayStation for a considerable amount of time.
Arguments from both sides have been very interesting, to say the least, as Xbox is seemingly arguing the case that Call of Duty may not be the golden goose it appears as the games have been highly ranked consistently.
According to reports, Microsoft has offered Sony a 10-year deal to keep Call of Duty on PlayStation. Xbox’s argument against any issues of anti-trust are centered around Sony’s market power could not possibly be foreclosed by the smallest of the three console competitors, Xbox, gaining access to one franchise. It will be very interesting to see how this turns out for either party and whether Microsoft’s bid finally goes through.