The largest acquisition in video game history has been prevented by regulators, with a vote of 3-1, due to concerns about the potential suppression of competition
Microsoft’s acquisition of Activision Blizzard is facing opposition from the US Federal Trade Commission (FTC) due to concerns that it would hinder competition by limiting competitors’ access to popular gaming content. The deal, which Microsoft announced in January 2022, is valued at $68.7 billion, making it the largest acquisition in the gaming industry to date. Activision Blizzard, known for developing popular games such as Call of Duty and World of Warcraft, is the target of the acquisition by Microsoft, which already owns the Xbox video game console system.
On Thursday, following a private meeting, the FTC approved its complaint with a 3-1 vote, with the three Democratic commissioners supporting it and the lone Republican opposing it.
According to the US agency responsible for enforcing consumer protection and antitrust laws, the merger has the potential to stifle competitors of both its Xbox game consoles and its expanding games subscription business.
As per the agency, Microsoft has a history of acquiring valuable gaming content and utilizing it to eliminate competition from competing consoles. Furthermore, the UK’s competition regulator has expressed apprehensions regarding the deal, stating that it has the potential to significantly reduce competition in the areas of gaming consoles, multi-game subscription services, and cloud gaming services.
Holly Vedova, the head of the FTC’s competition bureau, stated that Microsoft has previously demonstrated its willingness to withhold content from its gaming competitors. She further added that their goal is to prevent Microsoft from acquiring a prominent independent game studio and using it as a means to impede competition in various rapidly expanding gaming markets.
Brad Smith, the President of Microsoft, has stated that the company intends to contest the FTC’s decision. He further added that despite their initial preference for resolving the matter through peaceful means, they are fully confident in their case and look forward to presenting it in court.
