FTC Sues Microsoft over Blizzard/Activision Purchase
Microsoft's plan to buy Activision Blizzard for $68.7 billion has faced a major hurdle as the Federal Trade Commission (FTC) filed a lawsuit to block the deal on December 8th, 2022. The FTC claims that the acquisition would harm competition and innovation in the video game industry, especially for Sony's PlayStation console.
Activision Blizzard is one of the largest and most successful video game publishers in the world, with popular franchises such as Call of Duty, World of Warcraft, Overwatch, and Candy Crush. Microsoft is already a dominant player in the gaming market with its Xbox console and Game Pass subscription service. The FTC argues that by combining these two giants, Microsoft would gain an unfair advantage over its rivals and could raise prices or limit access to Activision Blizzard's games on other platforms.
Microsoft has defended its deal as pro-competitive and pro-consumer, saying that it would invest more in gaming content and innovation, create more diverse and inclusive games, and support Activision Blizzard's employees amid ongoing allegations of sexual harassment and discrimination at the company. Microsoft has also promised to honor existing contracts with other platforms and continue to make Activision Blizzard's games available on PlayStation.
However, the FTC is not convinced by Microsoft's assurances. The regulator says that Microsoft has a history of breaking promises and engaging in anticompetitive behavior in other markets such as web browsers, operating systems, and cloud computing. The FTC also says that Microsoft could change its strategy in the future and use its market power to exclude or disadvantage PlayStation users.
The lawsuit marks a rare challenge to a tech merger by the FTC under President Biden's administration. The agency is led by Lina Khan, a prominent critic of big tech who has advocated for more aggressive enforcement of antitrust laws. The case will likely take months or even years to resolve in court unless Microsoft decides to settle with the FTC or abandon its deal altogether.
The outcome of this case could have significant implications for both gamers and game developers. If Microsoft succeeds in acquiring Activision Blizzard, it would become an even bigger force in the gaming industry with access to some of the most popular titles and franchises. This could boost its Xbox sales and Game Pass subscriptions while potentially hurting Sony's PlayStation business. On the other hand, if the FTC prevails in blocking the deal, it would send a strong signal to other tech giants that they cannot buy their way into dominance without facing regulatory scrutiny.
What do you think about this case? Do you support or oppose Microsoft's purchase of Activision Blizzard? How do you think it will affect your gaming experience? Share your thoughts below!
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