US competition authority seeks to block Microsoft’s takeover of Activision

Bad news for Microsoft. While the company multiplies the promises to convince the general public that a takeover of Activision would be good news for the competition, the Federal Trade Commission (FTC) does not see things the same way. The American competition authority announced on December 8 to open legal action against Microsoft in order to block the takeover.

The FTC brings out the heavy artillery

According to the FTC, the $69 billion buyout would allow Microsoft to “neutralize competitors from Xbox, subscription content services and cloud gaming“. And that’s not all, in his presentation of the problems, the American policeman takes out the heavy artillery in the face of the Windows editor: “by controlling Activision’s successful franchises, Microsoft would have both the means and the incentive to harm competition by degrading the quality of Activision’s games or the experience on rival consoles and services“.

To justify its decision, the FTC relied on historical precedent. According to the government agency, Microsoft’s acquisition of Bethesda in 2021 proved that the company “can and will limit the arrival of games at the competition“. The FTC takes as an example Starfield and red fallwhich is slated for release exclusively within the Microsoft ecosystem,”despite the guarantees that the company had given to the European antitrust authorities“. Indeed, we remember that Microsoft had sworn hand on heart that it would continue to “make current Zenimax games available on other platforms“. Small subtlety nevertheless, Starfield and red fall being still in development, the two titles therefore fall outside the definition of Zenimax games “current“according to Microsoft.

Microsoft is preparing for the clash

In a long open letter, the company nevertheless reaffirms that its intentions towards the franchise call of duty — which crystallizes a good part of the tensions — have not changed and that she wants “continue to grow franchises, distribute content widely, grow the community and monetize content across all platforms.In response to the FTC’s lawsuit, Brad Smith, vice president of Microsoft, saidbe confident in the outcome of this case” and claims to be completely ready to present his arguments in court.

On the side of European regulators, the takeover is not viewed favorably either. The European Commission has already listed the many risks that such a takeover could present. There is no doubt that after the blow administered by the FTC, the European authorities are also likely to attack Microsoft from all sides. The Windows publisher is therefore probably left for years of legal and political negotiations, with no guarantee of winning.

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