The mega merger between Microsoft and video game publisher Activision-Blizzard may be under threat by the Federal Trade Commission (FTC).
As first reported by Politico, their sources have stated that the FTC is ““likely to file an antitrust lawsuit to block Microsoft’s $69 billion takeover of video game giant Activision Blizzard.” The FTC has concerns on the deal, primarily due to the large sum involved in the merger between these tech giants. FTC Chairperson Lina Khan has called for scrutiny on the impact of the deal on workers.
At the moment, there is no official word on a lawsuit against the merger, Politico themselves report that it is not guaranteed. Currently, investigations are ongoing, with major steps already completed such as depositions by CEO’s Satya Nadella (Microsoft) and Bobby Kotick (Activision). If the FTC decides to move forward with a case, it could come as early as December.
Why could the merger be controversial?
There is precedence in this matter as the FTC has previously stopped the merger of book publishers Penguin Random House and Simon & Schuster for a more modest fee of $2.2 billion. In that case, the ruling stated that the merger had the potential to be anticompetitive, which can affect both authors and indirectly, consumers. A similar scenario could occur in the tech giants merger, where there is less competition among game publishers which could promote less lucrative publishing deals for game developers.
As discussed by Kotaku, Microsoft has come under fire from its many competitors due to the merger. Sony has publicly stated their belief that the deal will harm their ability to compete, reduce the choice of games and less choice for developers to publish games. Sony may also be concerned for the Activision published Call of Duty series being withheld from the PlayStation with this deal, considering it is not made available to other subscription services yet. Google has raised their own concerns, arguing that Microsoft has already intentionally degraded the quality of the Game Pass subscription when used with the Chrome operating system, and has further incentive to steer sales away from Google with the Activision merger.
Rift in the FTC paves way for the merger
Recently, the New York Post reported that the four-member FTC panel of commissioners are split over the decision to oppose the merger. Reports stated that at least one commissioner has taken a “sympathetic view” to Microsoft, and potentially open to a settlement. If the rift persists, there is a possibility that no lawsuit will be filed and the merger will go ahead.
Given Activision-Blizzard’s recent fall from grace with their fans, most gamers would certainly rejoice for the merger with Microsoft, at least from a gaming perspective. However, would this merger really change the landscape of gaming for the worse in the long term? That remains to be seen.
Sources: Politico, Kotaku, New York Post, True Achievements
