The case points to a broader strategy at the agency to challenge deals that could threaten competition in the future, particularly in emerging gaming markets. The lawsuit was filed in San Jose, California, on the same day that the FTC’s lawsuit against Facebook’s parent company, Meta, began. Acquisition of virtual reality company Within🇧🇷 The agency argued that if the companies could be kept separate, they would encourage each other to develop more features and attract more users and benefit from competition in the future.
The FTC’s lawsuit against Microsoft could derail the company’s ambitions to push harder at the gaming frontier. Activision owns massively popular titles like “Candy Crush” and “Call of Duty,” and its acquisition could strengthen Microsoft’s competition against Japanese console makers Nintendo and Sony.
On Thursday, the commission voted to file a lawsuit in administrative court, with three Democrats in favor of the complaint and one Republican against.
Microsoft hadn’t seen such a serious regulatory threat to its business in more than two decades when the Justice Department filed a landmark antitrust lawsuit against the company that trained it through years of legal battles.
After that case was settled in 2002, Microsoft largely avoided the antitrust glare directed at tech rivals including Facebook, Google, Apple and Amazon — until the proposed acquisition of Activision, the biggest deal in Microsoft’s history. (Amazon founder Jeff Bezos owns The Washington Post).
Microsoft President Brad Smith has indicated that the company will fight the lawsuit, saying the company has been “committed to addressing competition concerns from day one.”
“While we believe we will give peace a chance, we are confident in our case and welcome the opportunity to present our case in court,” Smith said.
After announcing its intention to buy Activision in January, Microsoft announced a series of policies and regulations to show regulators that the deal would not give it an unfair advantage in the gaming market. or harms employees🇧🇷 On Tuesday, Microsoft announced that it will bring the Call of Duty franchise to Xbox rival Nintendo Switch as the agency nears a decision on whether or not to block the deal. Earlier, he announced that “Call of Duty” will be presented on rival Sony’s Playstation.
The FTC moved to block the deal a day after Microsoft employees met with agency representatives to discuss the lawsuit, according to a person familiar with the meeting who spoke on condition of anonymity to discuss the private meeting. Smith said the company offered “proposed concessions” to the agency earlier this week.
According to an FTC news release on the complaint, Activision currently provides its popular games to 154 million monthly active users worldwide on a variety of video game consoles, computers, phones and tablets. But the FTC claims that could change if a deal is struck. Microsoft will have the ability to fend off competitors by withholding these games entirely from competing gaming systems, or by manipulating prices and lowering game quality on competing consoles.
According to an FTC official who spoke on condition of anonymity to discuss the lawsuit, the lawsuit warns that the deal could give Microsoft an unfair advantage not only in consoles, but also in more nascent games like subscription games and cloud gaming. the agency argument. The FTC argues that the deal could stifle innovation in these nascent gaming markets, the person said.
Microsoft’s gaming business, Xbox, earned $3.6 billion in the quarter ended in September. Xbox consoles lag behind rival Japanese console manufacturers Sony and Nintendo in sales. told the UK’s antitrust regulator in October. According to the FTC, Microsoft has a record of acquiring game content and then using it to defeat competition from rival console makers. The agency cited Microsoft’s purchase of game developer Zenimax and says the company’s subsidiary made exclusive titles for Microsoft devices, including Starfield and Redfall, despite earlier assurances to European regulators.
“Microsoft has already shown that it can and will withhold content from its gaming competitors,” Holly Vedova, director of the FTC’s Bureau of Competition, said in a news release. “Today, we are trying to prevent Microsoft from taking control of a leading independent game studio and using it to harm competition in many dynamic and fast-growing gaming markets.”
The European Union announced last month that it was investigating the deal, warning that Microsoft could “restrict access” to Activision’s games.
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