The US Federal Trade Commission said yesterday that it will file a lawsuit to stop the purchase because, in its opinion, it would give Microsoft the ability to “suppress competitors to its Xbox consoles and its rapidly expanding subscription content and cloud gaming business.”
The FTC stated in its lawsuit that Microsoft had allegedly deceived the regulatory authority of the European Union on the future exclusivity of ZeniMax games when that merger was approved to support its position. The following is a quote from the FTC statement:
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, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda’s titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.”
The EU regulator was approached today by the investigative journalism organization MLex, stating that they responded by criticizing the FTC’s position. ResetEra member Idas, who started the forum’s main topic on the Microsoft and Activision Blizzard merger, reported the article’s content on the board despite being behind a paywall. This is the entire content of the article:
Microsoft didn’t make any “commitments” to EU regulators not to release Xbox-exclusive content following its takeover of ZeniMax Media, the European Commission has said. US enforcers yesterday suggested that the US tech giant had misled the regulator in 2021 and cited that as a reason to challenge its proposed acquisition of Activision Blizzard.
The absence of competition concerns “did not rely on any statements made by Microsoft about the future distribution strategy concerning ZeniMax’s games,” said the commission, which itself has opened an in-depth probe into the Activision Blizzard deal and appears keen to clarify what happened in the previous acquisition.
The EU agency found that even if Microsoft were to restrict access to ZeniMax titles, it wouldn’t have a significant impact on competition because rivals wouldn’t be denied access to an “essential input,” and other consoles would still have a “large array” of attractive content.”
On January 18, 2022, Microsoft and Activision Blizzard revealed that they had struck an agreement under which the former would buy the latter for around $68 billion. In a furious PR battle, Sony has claimed that approving the transaction will put both rivals and customers in peril.
Some nations, like Saudi Arabia, Serbia, and Brazil, have already approved. Others, including the UK and the EU, are looking more closely at the agreement initially planned to close in June 2023. If Microsoft and Activision end up suing the FTC as they have threatened to do until the US regulatory agency backs down, that deadline will prove unattainable.