United States is trying to prevent Microsoft from buying the company that makes “Call of Duty,” which would cost €65 billion.
US regulators are going to court to stop Microsoft from buying “Call of Duty” maker Activision Blizzard for $69 billion (€65 billion). They say the megadeal could hurt competitors in the video game business.
Microsoft, which makes the Xbox console and game network, said in January 2022 that it would buy Activision in what would be the biggest deal in the history of the gaming industry.
Without Activision’s mobile, console, and PC games, Microsoft might have a hard time getting people to sign up for its new gaming subscription service.
Activision Blizzard owns some of the most popular games in the world, like the Call of Duty series, World of Warcraft, Overwatch, and Candy Crush.
Microsoft hopes that the purchase will help it compete with Tencent, which is the leader in gaming, and Sony, which owns PlayStation. Both Tencent and Sony have criticised the deal.
But in its complaint, the US Federal Trade Commission, which enforces antitrust law, said that Microsoft had a history of keeping valuable gaming content to itself. A hearing was set for August 2023.
Holly Vedova, head of the FTC’s Bureau of Competition, said, “Microsoft has already shown that it can and will keep content from its gaming competitors.”
“Today, we want to stop Microsoft from taking over a top independent game studio and using it to hurt competition in a number of fast-growing and changing gaming markets.”
The deal is also being closely looked at in the European Union and the United Kingdom, where investigations are under way but won’t be finished until next year.
Brad Smith, the president of Microsoft, said that the company is likely to fight the FTC’s action.
He said in a statement, “While we wanted to give peace a chance, we are confident in our case and welcome the chance to argue it in court.”
The FTC said that it was worried that Activision’s popular games, like “World of Warcraft” and “Diablo,” would no longer be available on a variety of consoles, PCs, and mobile devices.
To make regulators happy, Microsoft released a new set of rules for its app store soon after the deal was announced. These rules include giving developers who meet privacy and security standards free access to the store.
This week, Microsoft said it would make Call of Duty available on Nintendo devices for 10 years if its plan to take over the company went through. It said that it tried to give Sony the same offer.
Bobby Kotick, the CEO of Activision Blizzard, said he was sure the deal would go through.
“The claim that this deal is anti-competitive doesn’t match the facts, and we think we’ll win this challenge,” he told employees on Thursday, adding that he thought the companies’ arguments would win “despite a regulatory environment focused on ideology and misconceptions about the tech industry.”
The challenge from the FTC could be a test for President Joe Biden’s order to look into big tech mergers.
This year, both the Justice Department and the FTC have looked at ways to improve merger rules so that they can find and stop deals that hurt competition.