On Thursday, December 8, the Federal Trade Commission (FTC) filed an antitrust suit to block software developer Microsoft's
Commissioners with the FTC voted three to one to file the suit, or administrative complaint, against Microsoft. The complaint will need to pass several legal challenges before it can take effect against what will otherwise be the largest tech transaction in history.
"With control of Activision's content, Microsoft would have the ability and increased incentive to withhold or degrade Activision's content in ways that substantially lessen competition - including competition on product quality, price, and innovation," wrote the commissioner panel. "This loss of competition would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry."
Since announcing its plans to acquire Activision Blizzard back in January, Microsoft has denied claims that the deal would reduce competition in the video game market.
"We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers," Microsoft's Vice Chair and President Brad Smith said in a statement. "We have been committed since Day One to addressing competitive concerns, including by offering earlier this week proposed concessions to the FTC."
To combat antitrust accusations, Microsoft promised to provide Activision Blizzard's powerhouse game "Call of Duty" (COD) on competitors' platforms. The company also said that, even if the deal is completed, it still won't be a world leader in gaming. This claim is in stark contrast with the fact that Microsoft's video game revenue already makes it one of the top gaming companies in the world.
"While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court," Smith continued.
In its complaint, the FTC argues that Microsoft has a proven history of anti-competitive actions. Specifically, the panel pointed to Microsoft's 2021 deal to purchase game developer ZeniMax.
As a part of that acquisition, Microsoft promised European regulators that it wouldn't try to restrict the sale of its newly acquired games on consoles other than Microsoft's own Xbox. However, after its purchase of ZeniMax was completed, the tech giant announced that it would be making some ZeniMax games exclusive to the Xbox.
The FTC panel said that Microsoft's influence could lead Activision Blizzard to restrict the release of its titles to Microsoft consoles, something the games company has never done before.
"We want Call of Duty to be enjoyed by more players around the world. That requires COD being on diverse platforms after the merger of Microsoft + Activision Blizzard," Activision's Executive Vice President for Corporate Affairs and Communications Chief Lulu Cheng Meservey tweeted.
For its part, Microsoft says that it wants more people to play its games, not fewer. CEO of gaming Phil Spencer said in October that, while his company has worked to bring some of its exclusive games to non-Microsoft consoles, Sony hasn't done the same with its collection of exclusive material.
