The Federal Trade Commission’s effort in federal district court to pause Microsoft’s purchase of video game maker Activision Blizzard reveals an uphill fight for the regulator. The government’s case doesn’t meet the usual legal requirements for blocking a merger. Rather, it’s an effort by the regulatory agency to assert itself more boldly — what critics call a power grab.
But the FTC, led by Chairwoman Lina Khan, an appointee of President Joe Biden, fears anticompetitive effects from Microsoft’s purchase of Activision Blizzard. So it asked a federal court temporarily to stop the deal from closing before conducting a full trial in the agency’s in-house administrative court. If the federal court grants the injunction, the merger will be unable to close on the planned date of July 18 — perhaps causing Microsoft to abandon the deal altogether.
In court, the FTC made known its concern that once Microsoft owns Activision Blizzard-created games, it won’t offer them to competing consoles or will otherwise degrade the product as compared to its own console experience. In response, Microsoft pledged to offer Call of Duty, one of the most popular video games of all time, to other companies for 10 years. Nintendo signed the legally binding agreement, but Sony demurred and has continued to lobby against the acquisition.
“This case isn’t just about Sony and console markets, it’s about the future, and in particular what video gaming will look like in a few years, when the technology for gaming is radically different,” Stoller wrote.