Activision Blizzard Lawsuit : Microsoft issued a formal rebuttal on Thursday to the Federal Trade Commission’s concerns that the $68.7 billion acquisition is illegal and should be stopped. After years of dodging the political backlash that has targeted huge tech peers like Amazon and Google, the software behemoth now appears to be on a collision path with US authorities empowered by President Joe Biden’s push to crack down on anti-competitive activity.

According to the FTC, the acquisition might violate antitrust rules by stifling competitors to Microsoft’s Xbox game system. Further, it’s booming Xbox Game Pass subscription business. The disagreement revolves around Microsoft’s competition with Sony to secure popular Activision Blizzard franchises such as the military shooter game Call of Duty.


Microsoft’s response describes itself as the third-largest manufacturer of gaming consoles after Sony and Nintendo. It is one of only a few publishers of popular video games, with virtually no presence in mobile gaming. Although, it is attempting to gain a foothold.

On Thursday, Activision Blizzard filed its own counter to the FTC lawsuit, questioning the FTC’s “unfounded presumption” that Microsoft would desire to withhold Call of Duty from competing platforms. Bobby Kotick, the company’s CEO, believes the company will prevail.

The disagreement might be a challenging test case for FTC Chair Lina Khan. He was chosen by Biden and has vowed to boost antitrust enforcement. The FTC voted 3-1 in December to file the lawsuit trying to halt the acquisition, with Khan and two other Democratic commissioners voting in favor and the lone Republican voting against. The transaction is also being scrutinized in the European Union and the United Kingdom. This is where probes are not expected to conclude until next year.

FTC complaint

The FTC complaint cites Microsoft’s 2021 acquisition of well-known game developer Bethesda Softworks and its parent firm ZeniMax. It is an example of how Microsoft is making some upcoming game releases exclusive to Xbox. While promising European regulators that it had no intention of doing so. According to the FTC’s lawsuit, top-selling franchises like Call of Duty are crucial because they cultivate a base of devoted consumers who are attached to their preferred console or streaming service.

Microsoft has indicated that it will forcefully defend the case in court. It will have a team led by high-profile corporate attorney Beth Wilkinson. While simultaneously leaving the door open for a settlement. Microsoft’s last major antitrust dispute came more than two decades ago. It is when a federal judge ordered the company’s dissolution. It was a result of anticompetitive behavior relating to its dominating Windows software. On appeal, the decision was overturned, but the court imposed other sanctions on the corporation.

The FTC’s decision to refer the complaint to its in-house Administrative Law Judge D. Michael Chappell rather than seek an urgent federal court injunction to stop the merger might delay the case until August. This is when the first evidence hearing is set. Microsoft’s agreement with Activision Blizzard calls for a $3 billion breakup fee if the deal is not completed by July 18.

The timing and course of the litigation may be altered. It depends on how authorities in the United Kingdom and Europe rule on the merger next year. If Microsoft receives approval in Europe, it may be able to utilize that to speed up the process in US courts.

Activision Blizzard Deal

Microsoft revealed its intention to buy Activision Blizzard for $68.7 billion in cash on January 18, 2022. Microsoft would acquire Activision, Blizzard Entertainment, and King under the Xbox Game Studios brand under the terms of the arrangement, which is slated to be finalised by Spring 2023 subject to regulatory and shareholder approval.

It would get control of franchises such as Call of Duty, Crash Bandicoot, Spyro, Warcraft, StarCraft, Diablo, Overwatch, and Candy Crush as a result of the acquisition. It would be the largest video game acquisition in history if it is approved by foreign regulators. The deal was supposed to close in mid-2023, but as of December 2022, the U.S. Federal Trade Commission had formally opposed it.

Also Read : Reliance Retail acquires Metro India business for Rs 2850 crore

 175 total views,  1 views today