Politically are reporting that the Federal Trade Commission “is likely to file an antitrust lawsuit to block Microsoft’s $69 billion acquisition of video game giant Activision Blizzard,” according to three people with knowledge of the matter.
the FTC, emboldened by their recent success in preventing the merger of book publishers Penguin Random House and Simon & Schusterhaven’t made an official announcement yet, and the Politically report says “a lawsuit against the deal is not guaranteed”.
Steps are being taken to prepare for one, however, with “a lot of the heavy lifting” already done, like receiving statements from the heads of Microsoft (Satya Nadella) and Activision Blizzard (Bobby Kotick). Because of this, it says, “If the agency pushes a case forward, it could arrive as early as next month.”
Any antitrust case would have a pretty clear objective: The FTC would argue that allowing a major platform owner to buy Activision Blizzard, one of the world’s largest third-party vendors, would give Microsoft an unfair advantage in the marketplace.
This reasoning and this process is already underway in Europe. Earlier this month, the European Union launched “a full investigation” into the proposed deal. say in a statement:
The Commission’s preliminary investigation shows that the merger may significantly impede competition in the markets for the distribution of console and PC video games, including multi-game subscription services and/or cloud game streaming services, and PC operating systems.
The preliminary investigation indicates that Microsoft may have the ability and potential economic incentive to engage in foreclosure strategies against Microsoft’s competing console video game distributors.
In the UK, meanwhile, there is the Competition and Markets Authority Also investigating the deal, saying the merger “may be expected to result in a significant reduction in competition in one or more UK markets for goods or services”.
Interestingly the Politically report also mentions Google as a “lesser” opponent of the merger, saying, “The company has argued that Microsoft intentionally degraded the quality of its Game Pass subscription service when used with Google’s Chrome operating system, and ownership of Activision would be its.” Increase incentive to do so, ultimately driving hardware sales toward Microsoft and away from Google.”
UPDATE 10:00 PM ET: An Activision spokesman tells Kotaku:
Any suggestion that the transaction could lead to anti-competitive effects is completely absurd. This merger will benefit players and the US gaming industry, especially as we face increasingly stiff competition from abroad. We aim to continue to work cooperatively with regulators around the world to enable the transaction to proceed, but will not hesitate to fight to defend the transaction if necessary.
