Microsoft’s proposed purchase of Activision-Blizzard isn’t progessing quite as smoothly as the companies probably hoped it would. Regulators around the world are closely scrutinizing the $69 billion takeover and Microsoft have found themselves backed into promising they’ll sign lengthy agreements to keep Call of Duty on PlayStation consoles. Until now, the one silver lining for Microsoft and Activision Blizzard, is that we haven’t heard much from American regulators (the UK’s Competition and Markets Authority and the European Commission are the ones currently putting the deal under the microscope). Well, it seems that silver lining may be about to evaporate.
According to a new report from Politico, which is said to be based on accounts of three people with knowledge of the matter, the US Federal Trade Commission is “likely” (their words) to file an antitrust lawsuit to block Microsoft’s acquisition of Activision Blizzard. This is said to be part of a larger agenda by the FTC to rein in the power of large technology companies.
Before we get too ahead of ourselves, a lawsuit isn’t guaranteed, as FTC’s commissioners still need to vote on the matter, but it’s said they’re skeptical of Microsoft’s arguments. The FTC’s investigation into the deal is still ongoing, but a lot of the “heavy lifting” is said to be done, so an announcement of a lawsuit may come soon, possibly next month. Microsoft spokesperson David Cuddy provided the following statement to Politico in response to their report.
“Microsoft is prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence. We’ll still trail Sony and Tencent in the market after the deal closes, and together Activision and Xbox will benefit gamers and developers and make the industry more competitive.”
This deal has already been more of a headache than Microsoft was probably planning on, and needless to say, a full-on antitrust lawsuit from a US federal regulator would be a major blow. Of course, we’re still in the realm of rumor for now, but things are starting to feel uncomfortable.
Activision Blizzard has faced a series of lawsuits and other legal action on the heels of a suit filed by California’s Department of Fair Employment and Housing (DFEH) alleging widespread gender-based discrimination and sexual harassment at the Call of Duty publisher. You can get more details on that unfolding story here.
What do you think? Does the Activision Blizzard acquisition go through in the end? Or have Microsoft comitted a major strategic blunder?
