As quoted from Politico, the US Federal Trade Commission is likely to file an antitrust lawsuit to block Microsoft’s $69 billion (roughly Rs. 5,63,500 crore) takeover bid for video game publisher Activision Blizzard.
The FTC is exploring the merger of two major players in the cybersecurity industry. However, they are not guaranteed to challenge the deal and there has been no indication as to when and if they will meet with lawyers representing the companies, according to a recent report. The report also mentioned that staff at the FTC are skeptical of arguments made by the two entities involved.
Reuters has reached out to the FTC for comment and they did not immediately provide a statement.
“We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but we won’t hesitate to fight if necessary,” an Activision Blizzard spokesperson said. Any suggestion that the transaction could lead to anticompetitive effects is “completely absurd,” the spokesperson added.
Activision shares fell by about 2% during extended trading, ending the day at 1%.
Microsoft, the maker of the Xbox gaming console, announced in January their purchase of Activision and its significant games such as Call of Duty and Candy Crush. In this deal, Microsoft becomes the largest game company in history.
Microsoft is making a big bet on this acquisition. It will help them compete better with Tencent and Sony, their two biggest competitors in the gaming market.
The deal is being questioned in other countries as well. The EU Commission opened a full-scale investigation on the matter earlier this month. Once the commission compiles all of its findings, it will decide whether or not to clear or block the deal.
The British Competition and Markets Authority, an antitrust watchdog, said it would conduct a full-scale probe in September.
Microsoft’s acquisition of Activision has left Britain’s antitrust regulator concerned. The deal may cause significant damage to the industry since Microsoft could refuse to give rivals access to their best-selling games.
The deal has drawn criticism from Sony, the company behind the Playstation. They’ve clarified that, since Microsoft owns Call of Duty, this puts an unfair amount of power in their hands.
In response to Sony’s recent statement, Microsoft President and Vice Chair Brad Smith said “Sony is the leader in this space… but we’re committed to making the same game available on Xbox and PlayStation.”
A Microsoft spokesperson has said: “We are prepared to address the concerns of regulators, including the FTC, in order to ensure that this deal closes with confidence. We’ll still trail Sony and Tencent in the market after the deal closes and together Activision and Xbox will benefit gamers and developers while making the industry more competitive.”
