U.S. Federal Trade Officially Announces Decision To Block Microsoft-ABK Acquisition

Late last month, the U.S. Federal Trade Commission revealed that it was laying the groundwork to block the Microsoft-Activision Blizzard merger due to antitrust concerns. Today, the commission has formally announced that it will be moving forward with its plans to file a federal antitrust lawsuit to put a stop to the controversial acquisition.

According to the FTC, the merger would allow Microsoft to monopolize a big share of the video game market and give them the power to limit consumer choices by making Activision Blizzard’s games exclusively available on PC or Xbox consoles. It also cited Microsoft’s earlier assertions that it won’t be making Bethesda Softworks’ multi-platform games PC or Xbox-exclusive before it went and did it anyway.

While the FTC’s announcement doesn’t necessarily mean that deal is dead, it’s going to throw an extremely big wrench into the process which both Microsoft and Activision Blizzard is looking to finalize before July 2023.

“This vote departs from precedent but the law hasn’t changed,” Activision Blizzard CCO Lulu Cheng Meservey tweeted in response. “Any claim the deal is anticompetitive ignores facts; the deal benefits gamers and the industry, especially given competition from abroad. We look forward to proving our case in court and closing our deal with Microsoft.”

Activision Blizzard CEO Bobby Kotick also responded to the FTC’s announcement with a letter to employees, which you’ll find in full below:

Team,

I wanted to provide a brief update on our pending merger with Microsoft. This week the U.S. Federal Trade Commission (FTC) announced its decision to challenge the deal. This means they will file a lawsuit to block the merger, and arguments will be heard by a judge.

This sounds alarming, so I want to reinforce my confidence that this deal will close. The allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge.

Thanks to the hard work by all of you every day, we’re on a strong path, bringing epic joy to players around the world with what I believe are the greatest games in the industry. At the same time, the competitive landscape is shifting, and, simply put, a combined Microsoft-ABK will be good for players, good for employees, good for competition and good for the industry. Our players want choice, and this gives them exactly that. You can read more about the specifics on those points in this update we recently shared with you.

We believe these arguments will win despite a regulatory environment focused on ideology and misconceptions about the tech industry.

The high-profile merger is also currently under scrutiny by the U.K. Competition and Markets Authority over the same concerns.