The Federal Trade Commission plans to sue Microsoft on Monday to prevent the company from completing its $69 billion purchase of video game powerhouse Activision Blizzard. said.
The planned lawsuit would be the final blow to Microsoft’s acquisition of Activision, which makes popular video games like Call of Duty and Candy Crush. Last year, the FTC filed a lawsuit to block the deal in an internal court, arguing it would hurt competition in several parts of the video game market. The agency plans to file the separate lawsuit Wednesday because, unlike the FTC’s in-house court, a federal court can issue a restraining order preventing a purchase from being completed.
Regulatory hurdles have piled up against the blockbuster deal, which has become a test case for whether behemoth tech companies can complete major acquisitions amid backlash against the companies’ growing power. In April, the British Competition and Markets Authority also decided to cancel the deal, although regulators in the European Union said in May that the deal could go through.
Governments around the world have challenged the power of tech giants like Microsoft. The FTC has accused Meta, Facebook’s parent company, of foreclosing nascent competitors and is investigating whether Amazon violates antitrust laws. The Justice Department has filed multiple lawsuits alleging that Google itself has committed antitrust violations.
An FTC spokesperson did not immediately respond to a request for comment on the planned lawsuit to stop Microsoft from completing the purchase of Activision. MLex, a regulatory news outlet, previously reported on the FTC’s plans.
In a statement, Microsoft president Brad Smith said the company welcomed the “opportunity to present our case in federal court.”
Microsoft has appealed the UK ruling to block the Activision deal and has pledged to challenge the FTC in court. But the legal challenges could significantly delay closing the deal, which the two companies had said they hoped would take place in July.
The UK parts of the deal cannot be closed while Microsoft’s appeal continues. If a federal court grants the FTC’s demand to prevent the deal from closing, that would also prevent Microsoft from completing the transaction in the United States.
But if Microsoft goes through with the deal, that would be a monumental moment for the $184 billion gaming industry. Microsoft makes billions of dollars every year in the video game industry, but competitors such as Nintendo and Sony – who make the PlayStation console – have long been regarded as having a better catalog of games that lure players to their devices. Adding Activision and its suite of game studios to Microsoft’s Xbox consoles and game subscription service could even widen the playing field.
This is an evolving news item and will be updated.
