Toni Dimaano Tech 12.08.2022 22:Dec PM EST

FTC Sues Microsoft To Block $69 Billion Activision Blizzard Deal

The Fair Trade Commission (FTC) is taking legal action to try and prevent Microsoft's plan to acquire Activision Blizzard for almost $69 billion.

According to The Verge, the FTC argues that the purchase will let the videogame giant suppress competitors in the industry, harming it in the process.

The Lawsuit Will Be A Significant Hurdle In The Activision Blizzard Deal

The deal caused antitrust concerns to surface when it was first announced in January, as critics believe that the gaming franchises published by Activision might be made exclusive to Microsoft.

With this, the FTC commissioners voted to sue Microsoft today, which means that the videogame company will face significant issues before successfully acquiring the Activation Blizzard deal.

Regulators from the United Kingdom and the European Union are also apprehensive of the deal, as the FTC notes that Microsoft has already shown that it can withhold content from its 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," says FTC Bureau of Competition director Holly Vedova.

Time writes that the Commission voted 3-1 to issue the complaint against Microsoft after a closed-door meeting with four commissioners on the board.

This complaint emphasizes the previous game purchases of the company, including the well-known Bethesda Softworks and its parent ZeniMax.

It is important to note that should the Microsoft Activision deal happen, it will be the largest purchase of the company, making it the third-biggest gaming company in terms of revenue.

Activision Confident The Deal With Microsoft Will Still Close

Despite the controversy, Microsoft president Brad Smith claims that the company has been committed to addressing competition concerns since the beginning.

Likewise, Activision chief executive Bobby Kotick says in a letter that he remains confident that the two companies will be on the same page about the deal.

He also claims that the allegations that the deal is stunting the growth of healthy competition in the industry and believes that the companies will win the FTC lawsuit.

The chief executive also criticized how he thinks that the FTC has a regulatory environment that is heavily focused on building ideology and creating misconceptions in the tech industry.

According to Business Insider, this marks the greatest effort of the regulators in the tech industry since Lina Khan took over as the commission chair for FTC.

It is also the largest one Microsoft has faced since 1998, which follows the Department of Justice's decision to sue the company in an antitrust case related to its monopoly of the PC market.

However, with Microsoft's adamance, it is committed to raising the suit in court as necessary, which the FTC believes is an incredibly stubborn step.

Just on Wednesday, Microsoft also announced that it is bringing Call of Duty on Nintendo devices for a decade should the purchase deal come through.