FTC sues to block Microsoft-Activision Blizzard $69B merger

Microsoft’s planned $69 billion takeover of video game company Activision Blizzard ran into a wall after Federal Trade Commission on Thursday sued to block the bid.

The move is seen as a test case for President Joe Biden’s mandate to scrutinise big tech mergers.

According to FTC, it filed the complaint through its administrative process rather than taking the case to a federal court.

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said a prepared statement from Holly Vedova, director of the FTC’s Bureau of Competition.

The commission voted 3-1 to issue the complaint after a closed-door meeting, with the three Democratic commissioners voting in favor and the sole Republican voting against.

Microsoft’s president, Brad Smith, signaled in a statement Thursday that the company is likely to challenge the FTC’s action.

“While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court,” Smith said.

The company was scaling up its public defense of the deal in recent months as it awaited a decision. Smith said Microsoft has been committed to addressing competition concerns and brought proposed concessions to the FTC earlier this week.

“We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers,” Smith said.

Microsoft announced the merger deal in January but has faced months of resistance from Sony, which makes the competing PlayStation console, and has raised concerns with antitrust watchdogs around the world about losing access to popular Activision Blizzard game franchises such as the military shooter game Call of Duty.