In a press release on its official site, the U.S. Federal Trade Commission has announced that they are seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc.
They allege that the $69 billion deal, the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.
In a complaint issued yesterday, the FTC pointed to Microsoft’s record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, the parent company of Bethesda Softworks.
They say Microsoft pointed to how the company made several of Bethesda’s titles, including next year’s “Starfield” and “Redfall,” Microsoft exclusives. This was despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.
Holly Vedova, director of the FTC’s Bureau of Competition, says: “Microsoft has already shown that it can and will withhold content from its gaming rivals. Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”
Activision is one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices along with owning some of the biggest franchises, including “Call of Duty,” “World of Warcraft,” “Diablo” and “Overwatch”.
Activision currently has a strategy of offering its games on many devices regardless of producer. But that could change if the deal is allowed to proceed with the complaint indicating Microsoft could harm competition by “manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely, resulting in harm to consumers.”
Variety reports that mere hours before the issuance of this complaint, Activision Blizzard filed a lawsuit against two California state agencies that have probed allegations of sexual harassment and pay discrimination at the company.
Activision has faced public scrutiny of its business practices for the past few years following state and federal probes initiated after shocking allegations from employees and ex-employees about behavior at the company.
Source: FTC.Gov, The Guardian
