FTC is Likely to File Case Against Microsoft Over Its Acquisition of Activision

FTC is likely to file case against Microsoft over its acquisition of Activision. FTC is likely to file a case against Microsoft over its acquisition of Activision. This week, it seems less likely that Microsoft will be able to close on its $70 billion purchase of Activision Blizzard.

Politico says the U.S. FTC is “expected” to try to prevent the acquisition with an antitrust complaint, citing three persons with knowledge of the situation.

The announcement comes as regulators in the United Kingdom and the European Union give the deal their close attention. Governments throughout the world are eager to regulate the dominance of large computer firms, and Microsoft’s entrance into the gaming industry gives them a prime opportunity to do so.

FTC file case against Microsoft
FTC file case against Microsoft

Lina Khan, the head of the FTC, has been quite vocal about her disapproval of any attempts to create a monopoly in the technology sector. No final judgement has been made, but sources tell Politico that “the FTC personnel investigating the agreement are sceptical of the corporations’ justifications.”

Meanwhile, on Wednesday the U.K. regulator, the Competition and Markets Authority, disclosed conflicting comments the two firms had made to its inspectors in October, taking the verbal battle between Sony and Microsoft over the acquisition to a new, ridiculous level.

Sony has pleaded with regulators to stop the merger, claiming that having Microsoft’s own Activision Blizzard, and especially the Call of Duty series, will eliminate competition in the video game industry.

Both firms found themselves in the rare position of having to prove that their rival is more successful than they are, and they went to great lengths to portray themselves as the underdog. Microsoft objected, saying it was “not plausible” that Sony could be foreclosed by the smallest of the three console competitors, Xbox, due to the loss of access to a single title.

(It has also strongly denied it would ever do such a thing; Microsoft gaming head Phil Spencer stated Call of Duty would remain on PlayStation “as long as there’s a PlayStation out there to ship to,” and Microsoft told the New York Times it has given Sony a further 10 years of Call of Duty titles.)

Microsoft has been quite kind in its assessment of its own exclusive games, claiming that they are inferior to Sony’s. The article claims that “Sony has more exclusive games than Microsoft, many of which are greater quality,” citing “iconic first-party series” like God of War and Uncharted as examples.

In comparison to Xbox, PlayStation has “almost five times as many” exclusive games. Sony responded by criticising its own subscription offering. It bemoaned, “Game Pass is much ahead of PlayStation Plus.”

Microsoft is miles ahead of the competition in the multi-game subscription service market. There are currently 29 million people that pay for Xbox Game Pass on console and Xbox Game Pass Ultimate, and that number is only anticipated to rise.

It also said, “The PlayStation Plus multi-game membership tiers are well behind.” Sony also indirectly insulted Electronic Arts’ Battlefield series when stating that Microsoft’s decision to make Call of Duty exclusive would make it impossible for any other company to compete in the FPS market.

Sony claimed, “Even assuming that SIE had the ability and resources to develop a similarly successful franchise to Call of Duty, it would take many, many years and billions of dollars to create a challenger to Call of Duty, and the example of EA’s Battlefield shows that any such efforts would more than likely be unsuccessful.” Microsoft plans to finish its acquisition of Activision Blizzard by the middle of 2023.

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