US Federal Trade Commission to block Microsoft’s $69 billion deal to acquire video game giant Activision Blizzard

The US Federal Trade Commission (FTC) is taking steps to prevent Microsoft’s $69 billion acquisition of video game giant Activision Blizzard, citing concerns about a gaming market monopoly. Last December, the FTC attempted to impede the deal through internal proceedings, but now it plans to seek a restraining order from the District Court for the Northern District of California before the July 18 deadline.

The FTC believes that Microsoft’s acquisition of Activision Blizzard would disrupt the gaming sector in the country and lead to Microsoft’s monopoly. According to the FTC, the purchase would grant Microsoft’s Xbox exclusive access to Activision’s games, leaving competitors like Sony’s PlayStation and Nintendo at a disadvantage.

Microsoft has offered to sign a legally binding consent decree with the FTC, ensuring that games like “Call of Duty” will be made available to rival companies, including Sony, for the next decade. Microsoft argues that the deal would benefit gamers and other gaming companies.

Microsoft’s President Brad Smith expressed the company’s willingness to present its case in federal court, demonstrating their determination to overcome the regulatory challenge. Activision, on the other hand, has not commented on the matter.

This regulatory hurdle is the latest obstacle for Microsoft’s high-profile deal with Activision, serving as a test for whether tech giants can successfully complete major acquisitions amidst growing concerns about their market power. The British Competition and Markets Authority (CMA) previously moved to block the deal, while regulators in the European Union granted approval for its continuation. Smith expressed disappointment with the CMA’s decision, stating that it had undermined public confidence in technology in the UK.

The significance of the Activision deal for Microsoft lies in the tremendous growth of the global gaming market, valued at $202.64 billion in 2021 and expected to expand further. Console devices accounted for a significant portion of the market’s revenue share, and Microsoft aims to establish itself as a dominant player in the industry to maintain a competitive edge, raising concerns about monopolistic practices.

As the battle over the Activision deal intensifies, industry experts and stakeholders eagerly await the outcome, recognizing its potential to shape the future landscape of the gaming industry.