The U.S. Federal Trade Commission made its case on Thursday for why Microsoft’s purchase of video game maker Activision Blizzard should be briefly stopped by a preliminary injunction. The FTC says a judge needs to stop Microsoft and Activision Blizzard from finishing their $69 billion merger until the agency’s in-house court can decide if the merger hurts competition in the video game industry.
The deal between the two companies was announced 17 months ago. In the government’s opening remarks, FTC lawyer James Weingarten said, “If this deal goes through, the combined company is likely to have the ability and incentive to hurt competition in various markets related to consoles, subscription services, and the cloud (for gaming).”
The FTC says that the merger would give Microsoft’s Xbox the only chance to play Activision games. This would leave Nintendo devices and Sony Group Corp’s PlayStation out in the cold.
Microsoft would own popular video games like Call of Duty, World of Warcraft, and Candy Crush if it bought Activision. In her opening comments, Microsoft lawyer Beth Wilkinson said, “I think you will see that every piece of evidence shows that it makes sense for Xbox to make these Activision games available to as many people as possible on as many platforms as possible.”
She also said that if the stay is upheld, there could be a three-year administrative process that would kill the deal.
On Friday, there will be a lot of experts and CEOs there, like Microsoft game CEO Phil Spencer, senior Microsoft finance director Jamie Lawver, and Dov Zimring, who was the former director of product management for Google’s now-defunct Stadia cloud game service. Jim Ryan, the CEO of Sony Interactive Entertainment, will appear in a video deposition.
The FTC has said that the deal, which would be the biggest for Microsoft and the biggest in the history of the video game business, would give Microsoft “the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition.”
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Microsoft Has Said That The Deal Would Be Good for Both Gamers and Gaming Businesses. It Has Also Offered to Sign a Legally Binding Consent Decree with The Ftc to Give “Call of Duty” Games to Competitors for Ten Years. The meeting is going to last until June 29. Next week, witnesses include Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick.
