{"id":37870,"date":"2022-12-12T15:46:32","date_gmt":"2022-12-12T20:46:32","guid":{"rendered":"https:\/\/mjtsai.com\/blog\/?p=37870"},"modified":"2023-07-12T15:17:47","modified_gmt":"2023-07-12T19:17:47","slug":"ftc-sues-microsoft-to-block-activision-blizzard-purchase","status":"publish","type":"post","link":"https:\/\/mjtsai.com\/blog\/2022\/12\/12\/ftc-sues-microsoft-to-block-activision-blizzard-purchase\/","title":{"rendered":"FTC Sues Microsoft to Block Activision Blizzard Purchase"},"content":{"rendered":"

Federal Trade Commission<\/a> (via Hacker News<\/a>):<\/p>\n

The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises such as Call of Duty, alleging that the $69 billion deal, Microsoft’s largest ever and the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.<\/p>

In a complaint issued today<\/a>, the FTC pointed to Microsoft’s record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda’s titles including Starfield<\/i> and Redfall<\/i> Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.<\/p><\/blockquote>\n\n

Tom Warren and Jay Peters<\/a>:<\/p>\n

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“We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers,” Brad Smith, Microsoft’s vice chair and president, said in a statement to The Verge.<\/p>\n

[…]<\/p>\n

Microsoft offered Sony a 10-year deal on new Call of Duty<\/em> games<\/a> last month, but Sony hasn’t yet accepted the offer. A similar deal was agreed upon between Nintendo and Valve<\/a>, though. It could see Call of Duty <\/em>heading to Nintendo consoles if the Activision Blizzard deal is approved.<\/p>\n<\/blockquote>\n\n

John Gruber<\/a>:<\/p>\n

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We’ll see how it plays out, but my gut feeling is that this is a mistake on the FTC’s part. The video game industry is incredibly competitive today. Yes, Xbox and PlayStation are the only two high-end consoles, but the Switch is quite arguably Nintendo’s most successful platform ever. And it’s not like Sony is some shrinking violet and lacks for its own exclusive titles. Exclusive titles are a big part of competition. It’s also the case that the dominant players in console and PC gaming are not<\/em> the dominant players in mobile gaming (Apple and Google).<\/p>\n<\/blockquote>\n\n

Florian Mueller<\/a>:<\/p>\n

I’m even more disappointed in what’s going on now, with the FTC wasting resources and losing credibility only because of some decision makers’ desire to be seen as boldly anti-Big Tech. And it isn’t even really<\/i> anti-Big Tech because Microsoft’s proposed acquisition of Activision Blizzard (NASDAQ:ATVI) has the potential to contribute enormously to a level playing field in mobile app distribution<\/a>, ultimately benefiting the little guys.<\/p>

[…]<\/p>

In yesterday’s analysis of the complaint<\/a>, I explained that the FTC hasn’t lied here--but it is fair to say that the FTC, which is hard pressed to find any<\/i> argument for blocking a totally lawful and even procompetitive merger, has misled<\/i><\/b> a lot of people into thinking that Microsoft walked back on a promise on which the clearance of a previous game studio acquisition depended.<\/p>

Microsoft published a document (PDF)<\/a> that explains what exactly happened around that acquisition: Microsoft kept its word.<\/p><\/blockquote>\n\n

Previously:<\/p>\n