FTC Sues Microsoft to Stop Activision Acquisition

The Federal Trade Commission (FTC) has decided to sue Microsoft to prevent their upcoming acquisition of Activision.

In a statement they released, the FTC pointed to Microsoft’s history of acquiring “valuable gaming content to suppress competition from rival consoles.” It further cites the recent acquisition of ZeniMax, and their choice to make Starfield and Redfall Microsoft exclusives despite their comments to European antitrust forces.

To further this, Director of the FTC’s Bureau of Competition, Holly Vedova, gave the following comment.

Microsoft has already shown that it can and will withhold content from its gaming rivals.

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.

FTC Release

The release also talks about the size of Activision’s user base, and the possible impact this could have on the industry.

Activision is one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices, including video game consoles, PCs, and mobile devices. It produces some of the most iconic and popular video game titles, including Call of Duty, World of Warcraft, Diablo, and Overwatch, and has a combined 154 million monthly active users around the world, according to the FTC’s complaint. Activision currently has a strategy of offering its games on many devices regardless of producer.

But that could change if the deal is allowed to proceed. With control over Activision’s blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely, resulting in harm to consumers.

FTC Release

While this does not mean the Activision deal is dead, it will likely be a long road before an outcome is reached.