FTC Sues to Prevent Microsoft's Acquisition of Activision Blizzard, Inc.

FTC is seeking to block Microsoft Corporation's acquisition of Activision Blizzard, Inc., arguing that the acquisition may lessen competition or create a monopoly in interstate trade and commerce in the relevant markets. FTC said that as a potential monopoly, Microsoft would have the ability and incentive to withhold content from rival companies.

According to the Complaint, FTC said that Microsoft's incentives to withhold Activision's content would also impact product quality, price and innovation, and the merger presents no efficiencies that would reverse the likely competitive harm. Based on past actions by Microsoft, FTC alleged that the company, if given the opportunity, would likely take advantage of the leverage the acquisition would create. In addition, FTC said that the acquisition may accelerate ongoing trends towards vertical integration in the high-end console and subscription service markets, in turn raising barriers to entry.

If the merger is approved, FTC requested that (i) each company operate in a manner consistent with operations prior to acquisition, (ii) neither company merge with, or acquire any other company involved, in the relevant markets without obtaining prior FTC approval and (iii) each company file periodic compliance reports.