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Report: FTC Sued to Block Microsoft's Activision Acquisition to Stop EU Accepting a Settlement

Report: FTC Sued to Block Microsoft's Activision Acquisition to Stop EU Accepting a Settlement - News

by William D'Angelo , posted on 26 January 2023 / 5,293 Views

The Federal Trade Commission (FTC) in December announced it was looking to sue to block Microsoft's acquisition of Activision Blizzard as it would give Microsoft the ability to suppress its competitors in gaming. 

A new report from Bloomberg claims the FTC filed the lawsuit quicker than expected as a way to dissuade the European Union regulators from accepting a settlement allowing the deal to be approved. This is according to people familiar with the investigations.

The FTC reportedly filed its complaint a matter of hours after US and European Union officials held a call about their investigations into the deal. During the call the European Union regulators said they planned to start discussions with Microsoft about a settlement.

Report: FTC Sued to Block Microsoft's Activision Acquisition to Stop EU Accepting a Settlement

This knowledge is what led the FTC to file the lawsuit on the same day, even though this wasn't supposed to happen until later in the investigation, according to the report. The FTC wasn't going to act until the Spring, according to the sources.

Fried Frank Harris Shriver & Jacobson LLP’s antitrust head Barry Nigro told Bloomberg the lawsuit was an attempt to "get out in front of the Europeans in an effort to shape the narrative."

FTC in its original filing looking to block the deal stated, "Microsoft decided to make several of Bethesda's titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.

"Microsoft has already shown that it can and will withhold content from its gaming rivals," said the Director of the FTC’s Bureau of Competition, Holly Vedova at the time. "Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets."

Report: FTC Sued to Block Microsoft's Activision Acquisition to Stop EU Accepting a Settlement

There was another report from this month that Microsoft is likely it will receive an antitrust warning from European Union regulators. The European Commission is preparing a statement of objections that will be sent to Microsoft in the coming weeks, according to the report.

Microsoft was already reportedly looking to offer remedies to concerns the European Commission in an attempt to prevent a statement of objections and to get the deal passed sooner. However, it appears the EU regulators are not open to remedies until after it sends its statement of objections.

Chile's regulatory authority, the Fiscalia Nacional Economica, in December 2022 released its ruling on Microsoft's Activision Blizzard acquisition and has voted to approve the deal in Phase 1. The acquisition has also been confirmed to have been approved in BrazilSaudi Arabia, and Serbia unconditionally.

A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.

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Azzanation (on 26 January 2023)

FTC is wasting Tax payers money.

  • +15
VAMatt Azzanation (on 26 January 2023)

No shit. That's all they ever do. They're among the most nonsensical government agencies.
And, that's really saying something considering some of the nonsense that comes out of the US government.

  • +7
CaptainExplosion (on 26 January 2023)

And yet again, I must bring up, that the FTC didn't do jack shit over Disney doing mass acquisitions.

  • +12
VAMatt CaptainExplosion (on 27 January 2023)

As they shouldn't have. They shouldn't do anything here either.

  • +1
CaptainExplosion VAMatt (on 27 January 2023)

I'm just sick of the hypocrisy of the FTC. -_-

  • +7
S.Peelman (on 26 January 2023)

Someone’s really sh*tting their pants over this Microsoft Activision deal.

  • +12
ClassicGamingWizzz S.Peelman (on 26 January 2023)

It will be the funniest day on vgchartz if the deal goes down🤣

  • -10
S.Peelman ClassicGamingWizzz (on 26 January 2023)

Multiple probably :-) .

  • -2
Azzanation ClassicGamingWizzz (on 26 January 2023)

Be even worse if it goes through

  • +5
Mnementh ClassicGamingWizzz (on 27 January 2023)

Yeah, interesting. Microsoft will have a lot of money left to buy much more interesting studios en masse...

  • +3
Ayla Mnementh (on 27 January 2023)

Yea I rather they go after capcom sega and konami and it’ll still be cheaper

  • +6
LudicrousSpeed (on 26 January 2023)

It’s funny because had MS not bought Bethesda, Starfield would be a timed PS5 exclusive anyway

  • +11
tslog (on 27 January 2023)

FTC is so corrupt it's unbeliveable. They have rejected all facts that support the case, they have told easily disprovable lies, and now it's using rejection without basis - as a tactic to manipulate other countries to do its bidding.
Criminal charges can't come soon enough against the FTC

  • +9
VAMatt tslog (on 27 January 2023)

There aren't going to be any criminal charges though. It's government. They do whatever the fuck they want. Which is the fundamental problem with all government agencies. They essentially cannot be held to account.

They're full of unelected bureaucrats that cannot be fired. The figureheads at the top bounce around between running government agencies and sitting in the c-suite and boardrooms of big business. But, those people know their time in the agency is limited, and they want it that way. The head right out the door into a megabucks gig in one of the companies they were previously "regulating".

Corruption is the right word for it. It isn't limited to the FTC either. All US government agencies have the same problem, as do most others around the world.

  • +2
Kneetos (on 27 January 2023)

FTC: we don't want Microsoft to acquire actibliz because they are trying to build a monopoly on gaming by witholding content from rival companies

Sony: good, now buy all this DLC and have access to game features first "only on playstation"

  • +6
Mnementh (on 27 January 2023)

Barry Nigro told Bloomberg the lawsuit was an attempt to "get out in front of the Europeans in an effort to shape the narrative."

Sorry, are you protecting consumer rights or making politics and trying to look good?

  • +4
Mozart1511 (on 26 January 2023)

Microsoft may adopt the strategy of opening more studios and capturing talent from its rivals. Using simple math, they would have the following scenario.

Number of workers per Studio = 1.000
Annual Salary per worker = US$ 110.000
Investment in manpower = 1.000 x 110.000 = US$ 110.000.000 / year

Time for IP development = 5 years

Total Investment = 5 x 110.000.000 = US$ 550.000.000

scenario 1
Number of Studios = 5
Cost = 5 x 550.000.000 = US$ 2.750.000.000

scenario 2
Number of Studios = 10
Cost = 10 x 550.000.000 = US$ 5.500.000.000

scenario 3
Number of Studios = 15
Cost = 15 x 550.000.000 = US$

scenario 4
Number of Studios = 20
Cost = 20 x 550.000.000 = US$

The 70 billion would be divided as follows

  • 3 billion for Activision Blizzard
  • 20 billion for the creation of new studios (11 for labor and 9 for infrastructure and other expenses)
  • 10 billion expanding in-house studios
  • 37 billion for other investments
  • +3
SKMBlake (on 27 January 2023)

So the FTC won't MS be
Let MS be, so let us see
They tried to shut down GP on Gaming TV
But it felt so empty

  • +1
SuperNintend0rk SKMBlake (on 27 January 2023)

Now this looks like a job for Phil
So everybody, take a chill pill
Cause this'll pass, just wait and see
So we can play more games for free

  • +6
SKMBlake SuperNintend0rk (on 29 January 2023)

I don't understand why I got downvoted for this and you got upvoted

  • +2
SuperNintend0rk SKMBlake (on 29 January 2023)

Same lol I upvoted your comment so it wasn't me. The voting on this site often makes zero sense.

  • +3
Juanita (on 30 January 2023)

Plz MS dont cry.

  • 0
Dino (on 26 January 2023)

Starfield was announced as console exclusive in 2018 - two years before the Bethesda deal was announced, and three years before the deal closed.

  • -8
Doctor_MG Dino (on 26 January 2023)

Starfield was announced in 2018, but not as a console exclusive. It's exclusivity was announced sometime in 2021.

  • +11
EspadaGrim Dino (on 26 January 2023)

Starfield was announced with no platforms which is why MS made it exclusive

  • +9
gtotheunit91 Dino (on 26 January 2023)

It wasn't announced as console exclusive until Xbox's E3 2021. The teaser ended with that exclusive banner as an announcement

  • +5
Dino Dino (on 26 January 2023)

my bad!

  • +11
Kakadu18 Dino (on 26 January 2023)

It's fine, you just misremembered.

  • +7
Moonhero (on 27 January 2023)
  • -11
natertigra21 (on 26 January 2023)
  • -13
ClassicGamingWizzz (on 26 January 2023)
  • -15