The US Federal Trade Commission (FTC) is seeking a preliminary injunction to temporarily halt Microsoft’s acquisition of Activision Blizzard, a videogame maker. In the government’s opening arguments during a five-day evidentiary hearing, the FTC claimed that the merger would give Microsoft the ability and incentive to harm competition in various gaming markets, including consoles, subscription services, and the cloud. The FTC aims to prevent the deal from closing until its in-house court can rule on the potential negative impact on competition in the videogame industry.
According to the FTC, if the merger goes through, Microsoft’s Xbox console would have exclusive access to Activision games, potentially excluding Nintendo consoles and Sony’s PlayStation. Microsoft’s lawyer, on the other hand, argued that it would be in Xbox’s best interest to make Activision games available on multiple platforms. If the injunction is granted, it could lead to a three-year administrative proceeding that would effectively kill the deal.
Scheduled to testify during the hearing are key figures such as Microsoft Gaming CEO Phil Spencer, senior Microsoft finance director Jamie Lawver, former Google Stadia executive Dov Zimring, and Sony Interactive Entertainment CEO Jim Ryan, who will appear via video deposition. Resolving the FTC lawsuit is one of the significant antitrust battles Microsoft and Activision have faced globally in their efforts to finalize the merger. While the European Union approved Microsoft’s bid in May, British competition authorities blocked the takeover in April.
The FTC contends that the Microsoft-Activision merger, the largest in Microsoft’s history and the videogame industry’s biggest, would provide Microsoft with the ability and increased incentive to restrict or degrade Activision’s content in ways that significantly harm competition. Microsoft has argued that the deal would benefit gamers and gaming companies and has offered to sign a legally binding consent decree with the FTC, ensuring that Call of Duty games would be provided to rivals for the next ten years.
The hearing is scheduled to continue until June 29, with Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick among the witnesses scheduled for the following week.