The US Federal Trade Commission (FTC), which commits to preventing Americans from fraudulent, deceptive, and unfair business practices, seeks to block technology giant Microsoft’s [MSFT:US] USD69bn bid for leading video game developer Activision Blizzard [ATVI:US], as reported by Yahoo on December 9. The FTC has filed an administrative complaint against Microsoft, as the commission believes that Microsoft can and will withhold content from its gaming rivals. According to the complaint, the transaction is illegal as it would enable Microsoft to control how consumers beyond users of its own Xbox consoles and subscription services access Activision’s games, despite that the company has repeatedly pledged not to conduct such behaviors. 

Microsoft intends to diversify its business by venturing into video gaming and attract more non-corporate customers through the deal. However, the FTC pointed out that Microsoft had used valuable gaming content to suppress competition from rival consoles, such as its 2021 acquisition of ZeniMax, the parent company of game developer Bethesda Softworks. Specifically, it made several of Bethesda’s titles including Starfield and Redfall Microsoft exclusives, thus restricting consumers’ access. The FTC is trying to stop Microsoft from gaining control over a leading independent game studio and using it to undermine competition in multiple dynamic and fast-growing gaming markets, citing Holly Vedova, Director of the FTC’s Bureau of Competition.

Sources:

https://finance.yahoo.com/news/ftc-moves-block-microsoft-69-231655603.html

https://www.ftc.gov/news-events/news/press-releases/2022/12/ftc-seeks-block-microsoft-corps-acquisition-activision-blizzard-inc

https://www.wsj.com/articles/ftcs-move-to-block-microsofts-deal-for-activision-blizzard-came-despite-charm-offensive-11670628909

https://www.caixin.com/2022-12-09/101976165.html