Earlier this month, the US Federal Trade Commission (FTC) filed a suit to block Microsoft’s intended merger with Activision-Blizzard. “The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises such as Call of Duty, alleging that the $69 billion deal, Microsoft’s largest ever and the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business”, the FTC’s reasoning behind the suit reads. Fast forward two weeks and Microsoft is now also being sued by several gamers who feel that the planned $69 billion deal would give the company “an unrivaled position” in the gaming industry. As such, the group of gamers wants to block the planned merger. The antitrust lawsuit against Microsoft (not Activision-Blizzard), was filed in San Francisco yesterday by a total of ten plaintiffs who claim to be playing multiple Activision-Blizzard titles across, mostly, different platforms. While some of the plaintiffs only use their PlayStation console to play Activision-Blizzard games, others also claim to be using their Xbox console. “Microsoft already controls one of the industry’s most popular and largest video game ecosystems,” the suit reads. “The proposed acquisition would give Microsoft an unrivaled position in the gaming industry, leaving it with the greatest number of must-have games and iconic franchises.” The suit lists all of Microsoft’s acquisitions and mergers since 2014 up to the Zenimax Media (Bethesda) acquisition in 2020. Interestingly, the suit mentions that Rare was purchased in 2022, although this is likely an error with the date as that deal completed in 2002. The plaintiffs write that “the proposed acquisition of Activision-Blizzard by Microsoft poses a substantial threat to the Plaintiffs, and to the public at large, in that the proposed acquisition may substantially lessen competition in each of the relevant product markets, and may cause loss to the Plaintiffs, and the public at large, in the form of higher prices, less innovation, less creativity, less consumer choice, decreased output, and other potential anticompetitive effects, which deprive the Plaintiffs, and the public at large, of the salutary benefits of competition.” The group of gamers also mentions reduced competition in the labor market due to the employees having less choice among employers if the transaction would complete. “This is particularly concerning given that Activision Blizzard is currently engulfed in lawsuits from employees and from the California Department of Fair Employment and Housing, alleging that it engaged in widespread gender discrimination and sexual harassment”, the plaintiffs add. The suit is an interesting read for sure and we suggest reading it in full here. In a statement to Bloomberg Law yesterday, a Microsoft spokesperson defended the planned merger. “This deal will expand competition and create more opportunities for gamers and game developers as we seek to bring more games to more people,” the statement from Microsoft reads. It remains to be seen where things go next for Microsoft’s planned $69 billion megadeal, but it’s clear that this isn’t the last that we’ll be hearing about the critically discussed transaction.
