Federal Trade Commission Officially Opposes Microsoft's Activision Blizzard Buyout

Agency files a lawsuit in federal court claiming the deal is bad for consumers and will stifle competition.

Credit: FTC

The Federal Trade Commission (FTC) made its opposition to Microsoft's proposed $69B USD buyout of Call of Duty maker Activision Blizzard official on Thursday, setting the stage for what might be a protracted legal battle between the Xbox and Windows owner and the U.S. regulatory body that oversees antitrust violations.

The lawsuit opposing the acquisition was filed in federal court on Thursday, and in it the agency said that this transaction would harm consumers and stifle competition because Microsoft might potentially use Activision Blizzard’s AAA games such as Call of Duty and World of Warcraft to entice gamers to switch from rival platforms to its cloud gaming and console gaming platforms.

Reporting last week from the New York Post painted an entirely different picture where one of the Democratic commissioners might have sided with the Republican on the panel in giving the deal approval. It turns out that Politico’s reporting last week was closer to the truth, with commissioners voting 3-1 to file a lawsuit.

Sources close to Microsoft told Bloomberg last week that the company is prepared to fight the lawsuit in court, and that it had already offered Sony a 10-year deal to have Call of Duty on its PlayStation platform. On a related note, Microsoft announced that Switch console maker Nintendo had agreed to a 10-year deal related to the popular shooter.

If the acquisition were to fall through, Microsoft would have to pay Activision Blizzard $3B for the trouble of ending the deal.

While other regulators in the European Union and the UK have expressed strong concerns about the acquisition, the FTC is the first major agency in the world to officially oppose it.