FTC sues to block Microsoft’s acquisition of Activision

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The Federal Trade Commission on Thursday filed a lawsuit to block Microsoft’s $69 billion acquisition of video game publisher Activision Blizzard, alleging that the massive deal would allow the Washington technology giant to stop its competitors in gaming.

The case represents the FTC’s biggest effort to gain support from the tech industry since prominent tech critic Lina Khan (D) became the commission’s chairwoman, and is expected to bring time of enforcement of the trust with the willingness to bring the case to court instead. rather than pursuing a settlement with the company.

The case indicates a broader plan in the company to bring cases against businesses that may pose a threat to competition in the future, especially in the new sports market. The lawsuit was filed on the same day that a trial began in San Jose in the FTC’s case against Facebook’s parent company Meta for acquiring an internal virtual reality company. The company has said that if the companies can be independent, they will encourage each other to create more things and attract more employees, benefiting from competition in the future.

The FTC’s lawsuit against Microsoft could undermine the company’s goal of becoming a more aggressive player on the gaming side. Activision is the owner of popular titles such as “Candy Crush” and “Call of Duty,” and its acquisition could help Microsoft compete with Japanese console makers Nintendo and Sony.

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The commission voted Thursday in a party-line vote to refer the case to administrative court, with three Democrats supporting the appeal and one Republican against it.

Microsoft has not seen such a regulatory threat to its business in more than two decades, when the Department of Justice brought a landmark antitrust lawsuit against the company that trapped it in years of legal battles.

After the case was settled in 2002, Microsoft avoided antitrust focused on technology giants including Facebook, Google, Apple and Amazon – until the proposed acquisition of Activision, the largest transaction in Microsoft’s history. (Amazon founder Jeff Bezos owns the Washington Post).

Trustbusters go through their own big tech company

Microsoft CEO Brad Smith indicated that the company will fight the lawsuit, saying in a statement that the company “has worked since day one to address competition issues.”

“While we believe in giving peace a chance, we are confident in our word and welcome the opportunity to present our case in court,” Smith said.

Since announcing its intention to buy Activision in January, Microsoft has announced plans and arrangements aimed at showing regulators that the deal will not give it an unfair advantage in the games market or harm users. On Tuesday, as it is clear that the company is getting closer to the decision on the contract, Microsoft announced that it will bring the title service to the Nintendo Switch, an opponent of the Xbox. He previously said that he would make a call to action on Sony’s PlayStation PlayStation.

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The FTC moved to block the deal a day after Microsoft officials met with company representatives to discuss the case, according to a person familiar with the meeting, who spoke on condition of anonymity to discuss the confidential meeting. Smith said the agency gave the company “tentative approval” earlier this week.

Activision makes its popular games available to 154 million active monthly users around the world across a wide range of video games, computers, phones and tablets, according to the FTC’s report on the complaint. But the FTC says that if the deal closes, that could change. Microsoft will be able to block competitors by banning these games from competing game systems entirely, or by changing the price and sale of games at the game level.

The lawsuit warns that the agreement could not only give Microsoft a high stake in consoles, but also an unfair advantage in other growing games, such as subscription games and cloud games. , according to an FTC official who spoke on condition of anonymity to discuss it. industrial debate. The FTC argued that the deal could stifle innovation in the growing gaming market, the person said.

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Microsoft’s Xbox gaming business made $3.6 billion in the quarter ending in September. Xbox consoles are behind both Japanese console makers Sony and Nintendo in sales, the company told the UK antitrust regulator in October. Microsoft has a record of acquiring sports content and using it in squash tournaments from competition regulators, according to the FTC. The agency cited Microsoft’s purchase of game developer ZeniMax, and it says the company’s subsidiary made titles including “Starfield” and “Redfall” only for Microsoft devices despite earlier assurances to those -controlled European.

“Microsoft has already demonstrated that it can and will block content from game developers,” Holly Vedova, director of the FTC’s antitrust agency, said in a news release. “Today, we want to stop Microsoft from gaining control over the independent game industry and using it to harm competition in many fast-growing and fast-growing games markets.”

The European Union announced last month that it was opening inquiries into the deal, warning that Microsoft “could restrict access” to Activision’s games.

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