One of the biggest deals in the gaming world in recent years is likely to be unsuccessful when the US Federal Trade Commission (FTC) decides to intervene. .
According to a recent report from Politico, the US Federal Trade Commission (FTC) will “likely” block Microsoft’s $69 billion deal to acquire gaming giant, Activision Blizzard. This deal has been a hot topic of discussion since the time it was announced, with even Sony opposing the acquisition for fear of losing the Call of Duty franchise for the Xbox.
Politico reports that the FTC will likely file an antitrust lawsuit against the acquisition to prevent it from happening, following talks with “three people with knowledge of the matter.” If the FTC goes ahead with this lawsuit, it will be the biggest move the agency has made against tech companies like this. Politico also stated that the lawsuit would be a “big black spot” for Microsoft, a company that has always considered itself the good guy in antitrust matters to date.
This lawsuit is only a possibility at this point, as the report mentions that the four FTC commissioners have not ruled out filing a simple complaint or meeting with the companies’ attorneys. However, employees involved in reviewing this deal for the FTC expressed doubts about Microsoft and Activision Blizzard’s argument for the acquisition, so it’s still likely.
The agency is concerned that Microsoft’s acquisition of Activision Blizzard will give the company an unfair advantage in the gaming industry. Sony has spoken extensively to regulators and international regulators, arguing that brands like Call of Duty will put PlayStation at a significant disadvantage. Meanwhile, Microsoft has committed to keeping Call of Duty on the PlayStation and confirmed to the New York Times that it has proposed a 10-year deal to do so.
Regardless of which path the FTC decides to take, information surrounding the deal is likely to be released as early as next month. The agency is still in the process of investigating the merger, but most of the work has been done following high-profile lawsuits in both companies, such as Microsoft’s Satya Nadella and Activision’s Bobby Kotick. Microsoft also has to worry about regulators from countries like Europe, where the European Commission announced that it is in the second phase of its investigation into the acquisition deal.
So far, the Microsoft-Activision Blizzard merger has not gone smoothly. The two companies have until July 2023 to close the deal, but a lawsuit from the FTC could prevent that from happening in time.