Today, the Federal Trade Commission filed an antitrust lawsuit against Microsoft to block the company’s $69 billion acquisition of video game maker Activision Blizzard. The agency acted in order to prevent Microsoft from harming competition in the gaming marketplace, including consoles and subscription services.
The suit follows a letter sent this year by Public Knowledge and other organizations encouraging the agency to “closely scrutinize” the buyout of a “structurally important gaming developer and publisher.” The complaint mirrors several of the issues raised in Public Knowledge’s March 2022 blog post about the transaction. Public Knowledge has cautioned that the merger raises serious competition issues and risks harming gamers and the gaming industry.
The following can be attributed to Alex Petros, Policy Counsel at Public Knowledge:
“This FTC lawsuit sends a clear signal to any mammoth corporation exploiting vertical mergers: Not on their watch. We applaud the agency for moving to protect competition in the video game marketplace and to prevent popular franchises from being limited to particular consoles or particular game subscription services. This merger would give Microsoft control of massively popular franchises such as Call of Duty, Overwatch, and Diablo, which it could use to not only self preference its own Xbox and Windows PC platforms today but also potentially dominate gaming’s next generation tomorrow. The FTC’s assertive action could give fledgling markets like cloud-based and subscription gaming a chance to grow under the sunlight of competition.
“This is the latest signal that Big Tech can no longer just gobble up key suppliers and control lucrative markets unchecked. The FTC is doing its part to unshackle markets dominated by digital gatekeepers by taking on big, bold cases against titans of industry. It’s well past time for Congress to do theirs, beginning by giving agencies both the proper funds through the ‘Merger Filing Fee Modernization Act‘ and the proper tools through the ‘American Innovation and Choice Online Act‘ and the ‘Open App Markets Act.’”
View our latest blog post, “Will Microsoft Use Activision Blizzard to Freeze Out Rivals?,” to learn why the deal merits rigorous scrutiny.
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