The Federal Trade Commission (FTC) has taken legal action to prevent Microsoft’s acquisition of video game company Activision Blizzard. The move comes after the FTC expressed concerns that the acquisition could harm competition in the video game industry, leading to higher prices and reduced innovation.
Activision Blizzard is one of the largest video game companies in the world, with popular franchises such as Call of Duty, World of Warcraft, and Candy Crush. Microsoft announced its intention to acquire the company for $68.7 billion in January 2022, in what would be one of the largest acquisitions in the history of the video game industry.
However, the FTC has now filed a complaint in federal court seeking to block the acquisition. The complaint alleges that the acquisition would harm competition in several ways, including by reducing the number of major players in the video game industry and giving Microsoft too much control over important distribution channels.
According to the complaint, Microsoft already has significant market power in the video game industry through its Xbox gaming console and related services. The acquisition of Activision Blizzard would further consolidate Microsoft’s power and make it more difficult for other companies to compete.
The FTC also expressed concerns about the potential impact on consumers. The complaint notes that video game prices have already been rising in recent years, and that the acquisition could lead to even higher prices for popular titles. Additionally, the FTC argues that the acquisition could stifle innovation in the industry, as Microsoft would have less incentive to invest in new technologies and game development if it faced less competition.
Microsoft has responded to the FTC’s complaint by stating that it believes the acquisition is pro-competitive and will benefit consumers. The company argues that the video game industry is highly competitive, with many players vying for market share. Microsoft also notes that it plans to continue supporting Activision Blizzard’s existing franchises and investing in new game development.
The legal battle between Microsoft and the FTC is likely to be lengthy and complex. The outcome could have significant implications for the video game industry and for consumers who enjoy playing video games. If the acquisition is ultimately blocked, it could force Microsoft to rethink its strategy and look for other ways to expand its presence in the industry. Alternatively, if the acquisition is allowed to proceed, it could give Microsoft a dominant position in the market and make it more difficult for other companies to compete.
