US Regulator Moves to Block Microsoft's Acquisition of Activision Blizzard

The US Federal Trade Commission has initiated legal proceedings to halt Microsoft's proposed $68.7 billion acquisition of Activision Blizzard, citing concerns that the deal could enable Microsoft to stifle competition in the gaming sector. The FTC alleges that Microsoft's ownership of Activision Blizzard could lead to the suppression of competitors to its Xbox consoles and cloud-gaming business. This decision follows reports that the FTC was likely to file a lawsuit, and Microsoft was preparing to defend the deal in court. The commission's vote was three-to-one in favor of issuing the complaint, with one member voting against. The FTC's primary concern is Microsoft's history of acquiring valuable gaming content and using it to harm rival consoles. The regulator specifically cited Microsoft's $7.5 billion acquisition of ZeniMax Media, which owns Bethesda, and its subsequent decision to make the highly anticipated game Starfield exclusive to Xbox and PC. The FTC believes that Microsoft could manipulate Activision's pricing, degrade game quality, or withhold content from rival consoles, resulting in harm to consumers. Microsoft has attempted to address these concerns by offering concessions, including a promise to bring Call of Duty to Nintendo platforms and Steam for at least ten years if the deal is approved. However, the FTC remains unconvinced, and the acquisition still faces regulatory hurdles in the European Union and the UK. The deal has been approved in Brazil and Saudi Arabia, but its fate remains uncertain. Microsoft and Activision Blizzard have expressed confidence that the deal will ultimately be approved, with Microsoft president Brad Smith stating that the company believes the acquisition will expand competition and create more opportunities for gamers and game developers.