The legality of Microsoft’s acquisition of Activision Blizzard will be assessed in the United States not by the Department of Justice, but by the Federal Trade Commission, an institution usually hostile to large-scale mergers.
The spectacular acquisition of Activision Blizzard by Microsoft, for 68.7 billion dollars, could it be endangered by competition regulators? This is the question that many observers have been asking since the earthquake caused by the announcement of this takeover on January 18, 2022. The concrete answers will obviously still take a long time to emerge, but a first element comes all the same from arrive on the side of the American authorities: Bloomberg reports that the study of the transaction was entrusted to the Federal Trade Commission (FTC) in the United States, rather than the Department of Justice.
If both institutions have the same kind of authority for their antitrust investigations, the FTC’s appointment could be bad news for Microsoft. Indeed, the trade regulatory agency has made no secret of late about its hostility towards large-scale mergers and acquisitions, particularly in the new technology sector.
This orientation was printed by its president Lina Khan, appointed to this post in March 2021 by Joe Biden and known for her positions in favor of the dismantling of the digital giants. And its effects have already been felt: very recently, it was under pressure, among other things, from legal proceedings initiated by the FTC that Nvidia decided to abandon its acquisition of ARM for 40 billion dollars.
The impact on the PlayStation competitor in question
The case of the acquisition of Activision Blizzard will certainly give rise to heated discussions, not only because of its scale (if it were to succeed, the Gaming division of Microsoft would become overnight the world’s third largest video game player in turnover), but also because it directly impacts Microsoft’s most frontal competitor in this sector. Activision Blizzard is indeed a major commercial partner for Sony Interactive Entertainment, due in particular to the considerable revenue generated by the license call of duty on PlayStation consoles.
Admittedly, the Microsoft company has already undertaken to respect the existing agreements between the Activision Blizzard group and Sony. According to indiscretions, these would concern the next three games call of duty, to be released by the end of 2023. After this deadline, however, nothing would prevent Microsoft from unilaterally cutting ties with Sony. Not sure everyone sees this as a healthy competitive situation.