The Federal Trade Commission (FTC) is suing to block Microsoft‘s proposed acquisition of Activision Blizzardhas been reported.
An official statement from the FTC claims that the deal would not only give Microsoft the upper hand in the console market, but also in other areas such as subscription gaming and cloud gaming.
It claims that “the $69 billion deal, Microsoft’s largest ever and the video game industry’s largest ever, would allow Microsoft to stifle competitors to Xbox gaming consoles and its burgeoning subscription content and cloud gaming business”.
According to the FTC, the complaint cites previous instances of Microsoft acquiring other “valuable gaming content” and using it to stifle competition from rivals, pointing to its acquisition of ZeniMax, the parent company of Bethesdaas a remarkable example.
Update
Microsoft Vice Chairman and President Brad Smith has now released a statement respond to the news.
“We continue to believe this deal will increase competition and create more opportunities for gamers and game developers,” said Smith.
“We have been committed to addressing competition concerns since day one, including offering proposed concessions to the FTC earlier this week.
“While we believed in giving peace a chance, we have complete confidence in our cause and welcome the opportunity to take our case to court.”
The statement from the FTC claims: “Microsoft has decided to make several titles from Bethesda, including Star field and redfallExcluding Microsoft despite assurances it had given European antitrust authorities that it had no incentive to withhold games from rival consoles.
The FTC files such administrative complaints when it “has reason to believe” that the law is being violated and that legal proceedings are in the public interest. The charges will now be tried in a formal hearing before an administrative judge.
Holly Vedova, director of the FTC’s Bureau of Competition, stated: “Microsoft has already shown that it can and will withhold content from its gaming rivals. Today, we’re trying to prevent Microsoft from taking control of a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.
In recent weeks, Xbox has tried to emphasize its commitment to keeping Call of Duty – arguably the main game impacting this issue Play station platforms.
Earlier this week, Microsoft president Brad Smith gave more details in a Wall Street Journal editorial on the company’s offerings to keep the Call of Duty franchise on PlayStation for at least a decade.
“An essential portion of Activision Blizzard’s Call of Duty revenue comes from the sale of PlayStation games,” Smith wrote. “Given the popularity of cross-play, it would also be disastrous for the Call of Duty franchise and Xbox itself, alienating millions of gamers.
“That’s why we offered Sony a 10-year contract to make every new Call of Duty release available on PlayStation the same day it comes to Xbox. We are open to making the same commitment to other platforms and making it legally enforceable by regulators in the US, UK and European Union.”
Microsoft also stated on Wednesday that it has cfailed to release Call of Duty games on Nintendo platforms and Steam for the next 10 years if it successfully takes over Activision Blizzard.
This was followed by a timely statement of support from Valve co-founder and CEO Gabriel Newelwho stated that a lengthy offer to keep the series on Steam was unnecessary as “Xbox always delivers on its promises”.
However, Xbox head Phil Spencer also claimed this week that Sony is showing little willingness to come to the table in an attempt to reach agreement on the proposed deal.
Speaking to Bloomberg, Spencer said: “From where we sit, it’s clear they’re spending more time with the regulators than with us trying to get this deal done.
“Our intention is to become more relevant on more screens. We have a pretty good idea of how to build a win-win relationship Nintendo and frankly Sony.”
The European Commission and the UK CMA also recently launched in-depth investigations into Microsoft’s acquisition plans.
