The FTC is ‘likely’ to file a lawsuit to block Microsoft’s purchase of Activision Blizzard.
The suit would signify a major step by FTC chair Lina Khan to reign in big tech companies.
The deal remains intact and the companies still have until July 2023 to close it.
The Federal Trade Commission is likely going to file an antitrust lawsuit against Microsoft in an attempt to block the tech giant’s takeover of video game manufacturer Activision Blizzard, multiple sources familiar with the matter told Politico on Wednesday.
While there is still no guarantee that a lawsuit will be filed, the move would be an indictment against big tech companies and their future acquisitions from FTC chairwoman Lina Khan, who has been an outspoken critic of big tech firms like Google, Facebook, and Amazon.
The FTC’s investigation is still ongoing, but a decision to move ahead with a case could come as early as next month, sources told Politico on the condition of anonymity.
A spokesperson for the FTC declined to comment on the matter to Insider.
Microsoft first announced its purchase of Activision Blizzard, which manufactures popular video game titles like Call of Duty and Candy Crush, in January. The company has a large stake in the videogame industry already with its popular Xbox console line. Microsoft’s primary competitor Sony, which manufactures the Playstation console, has been outwardly critical of this deal.
In an October statement to the UK’s Competition and Markets Authority, Sony argued that the deal will hurt its ability to compete with Microsoft and give consumers less choice over where they can access and purchase games. Microsoft countered these concerns in an additional statement to the UK governing agency, saying that it has promised to keep ‘Call of Duty’ available on its platforms and argued that Sony’s objection to the deal only stemmed from its desire to maintain its top spot worldwide in gaming.
“As we have said before, we are prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence,” a spokesperson for Microsoft told Insider. “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 is not the first time this merger has faced legal scrutiny: several shareholders in New York-based pension funds filed a lawsuit against Activision Blizzard back in April claiming that the rushed nature of the deal was due in part to avoid further attention on Activision’s sexual harassment scandals.
“Any suggestion that the transaction could lead to anticompetitive effects is completely absurd. This merger will benefit gamers and the U.S. gaming industry, especially as we face increasingly stiff competition from abroad,” a spokesperson for Activision told Insider. “We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but won’t hesitate to fight to defend the transaction if required.”
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