On Monday, the FTC requested a judge to temporarily prohibit Microsoft Corp.’s acquisition of Activision Blizzard until the government’s case against the $69 billion merger is heard.
The FTC sought a federal judge to stop any formal agreement before 11:59 p.m. ET June 15 since Microsoft and Activision indicated the deal may complete Friday.
Microsoft would have the “ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition,” according to the FTC.
Without a judge, the merged entity “could alter Activision’s operations and business plans” and allow the software giant to access crucial business information, the FTC claimed.
In early December, the FTC asked an in-house administrative judge to block the transaction because it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony Group Corp.’s PlayStation out in the cold.
In May, the EU authorized Microsoft’s $69 billion acquisition of “Call of Duty” videogame producer, while British competition regulators halted it in April.
Microsoft rose 1.5% Monday, while Activision lost 0.8%.
“We welcome the opportunity to present our case in federal court,” said Microsoft president Brad Smith. Activision was silent.
Microsoft offered to sign a legally binding consent decree with the FTC to distribute “Call of Duty” games to rivals like Sony for a decade, saying the pact would benefit gamers and gaming firms. Microsoft announced the transaction in January 2022, expecting it to conclude in their June 2023 fiscal year.
“In light of that, and public reporting that Microsoft and Activision Blizzard are considering closing their deal imminently,” an FTC spokesman stated.
The case shows President Joe Biden’s aggressive antitrust enforcement.
Antitrust experts think the FTC may struggle to persuade a judge to invalidate the acquisition due to Microsoft’s voluntary concessions to quell concerns it could monopolize the gaming business.