FTC Asks US Court To Block Microsoft-Activision Deal
In a surprising turn of events, Federal Trade Commission (FTC) has asked a US court to block Microsoft's takeover of Activision Blizzard (game studio).
The FTC has asked for a temporary block on the deal to make sure that the government's narrative on the issue can be heard. The acquisition of Blizzard by Microsoft is worth $69 Billion and thus presents one of the biggest deals of 2023.
According to the FTC, the deal between Activision and Microsoft will be finalized on Friday. But before that can happen, the FTC is asking the judge to temporarily block it.
Fear Of Microsoft's Monopoly
The FTC's view on the acquisition is that it will give unfair leverage to Microsoft. In fact, it would even allow Microsoft to limit the Activison content on other platforms, thus discouraging the competition.
To put it in simple words, Microsoft might try to make the Activision content only available on Xbox and other platforms owned by Microsoft. This would harm the competition, including Sony's PlayStation.
The FTC also added that Microsoft could even alter the business plans and operations of Activision thus allowing it to access business information of sensitive nature.
FTC is the responsible body for enforcing the antitrust laws and that appears to be the main issue in this case as well. According to FTC, this deal will affect other consoles including Sony and Nintendo.
Just a few months ago, Microsoft's deal to buy Activision was approved by the EU authorities but the UK antitrust authorities didn't approve it.
Now, it seems that even the US authorities are against the deal and want certain assurances from Microsoft before allowing the deal.
After the news, the shares in Activision were down by 0.8% while Microsoft shares were by up 1.5%. According to Microsoft, they welcome any opportunity provided to them to present facts about their case.