The US Federal Trade Commission presented its case in federal court on Thursday, seeking a preliminary injunction to temporarily halt Microsoft’s acquisition of Activision Blizzard, a popular videogame maker. The FTC lawyer, James Weingarten, expressed concerns about the potential for the combined company to harm competition in various markets related to consoles, subscription services, and cloud gaming. The FTC is requesting that the merger be halted until the agency’s court can assess the impact on competition in the videogame industry.
One of the main arguments put forth by the FTC is that the merger would give Microsoft’s Xbox console exclusive access to Activision games, effectively sidelining competitors like Nintendo and Sony’s PlayStation. Microsoft’s lawyer, Beth Wilkinson, countered this argument by stating that it would make sense for Xbox to make the Activision games available on multiple platforms. Wilkinson also warned that granting an injunction could lead to a lengthy administrative proceeding that would jeopardize the deal.
Several key individuals are set to testify in the coming days, including Microsoft Gaming CEO Phil Spencer, senior Microsoft finance director Jamie Lawver, former Google Stadia executive Dov Zimring, and Sony Interactive Entertainment CEO Jim Ryan. This lawsuit in the US is just one of the antitrust battles Microsoft and Activision have faced globally in their effort to finalize the merger. While the European Union approved the deal in May, British competition authorities blocked it in April.
The FTC contends that this merger, being the largest for Microsoft and the biggest in the history of the videogame industry, would give Microsoft the power and incentive to manipulate Activision’s content in a way that significantly limits competition. Microsoft, on the other hand, argues that the deal would benefit gamers and gaming companies and has even offered to sign a legally binding agreement with the FTC to provide Call of Duty games to rivals for ten years.
The evidentiary hearing is scheduled to continue until June 29, with Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick among the witnesses to testify in the following week.
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