By: Wall Street Journal
December 8, 2022
The Federal Trade Commission Thursday sued Microsoft Corp. MSFT -2.36%decrease; red down pointing triangle to block its planned $75 billion acquisition of Activision Blizzard Inc., ATVI -2.43%decrease; red down pointing triangle taking one of its biggest shots under the Biden administration at halting a merger of technology giants.
The lawsuit sets the stage for a court challenge over the deal as Microsoft agreed as part of negotiations with the “Call of Duty” publisher to defend the acquisition against a government lawsuit.
The law enforcement agency said the deal is illegal because it would give Microsoft the ability to control how consumers beyond users of its own Xbox consoles and subscription services access Activision’s games. The company could raise prices for people who don’t use Microsoft’s hardware to access the games, or even cut off access entirely, the FTC said.
“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, director of the FTC’s bureau of competition, in a statement. “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.”
Microsoft said it continues to believe the deal, which it values at $68.7 billion after adjusting for Activision’s net cash, would expand competition and signaled it plans to litigate with the federal agency.