Microsoft Activision deal to be reviewed by US competition regulators

Date:
Tue, 01 Feb 2022 11:42:34 +0000

Description:
The Federal Trade Commission will determine if Microsoft's purchase of Activision Blizzard breaks antitrust laws

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Microsofts agreed acquisition of Activision Blizzard is to be subject to an antitrust review by the US Federal Trade Commission (FTC).

The FTC will lead the investigation to determine whether the proposed deal will substantially undermine market competition, Bloomberg reports, citing a source familiar with the matter.

Typically, the FTC or US Department of Justice will review acquisitions that are valued over a certain threshold . Deals are assigned to each agency on a case-by-case basis, depending on their expertise in the relevant industry.

However, the FTCs involvement in the acquisition is particularly noteworthy because FTC chair Lina Khan has been an outspoken critic of tech giants and corporate consolidation.

Khan has previously argued the need to break up and rein in Big Tech
companies , such as Amazon, Facebook, Google, and Apple. Her appointment as chair of the FTC led to both Amazon and Facebook filing petitions seeking her removal from any investigations into those companies.

While chair of the FTC, Khan has already blocked one major tech deal that directly influences gaming: GPU manufacturer Nvidias proposed acquisition of ARM , which now looks set to be dropped entirely. Analysis: more consolidation, less exclusivity (Image credit: Treyarch)

In its investigation, the FTC is likely to scrutinize the extent to which Microsofts agreed acquisition of Activision Blizzard will undermine competition through platform exclusivity. If the deal goes through Microsoft would be in a position to keep several major gaming franchises, including the best-selling Call of Duty series, exclusive to Xbox, and off PlayStation altogether.

Xbox boss Phil Spencer was quick to alleviate immediate concerns after the deal was announced, saying he doesnt intend to pull communities away from other platforms. Similarly, it was revealed that existing contractual arrangements guarantee the next three Call of Duty games will release on PlayStation . However, past that point, the future exclusivity of the series, and others like it, is unclear. Microsoft has committed to nothing concrete.

If Microsoft can sufficiently demonstrate to regulators that its control of these major franchises doesnt substantially hinder competition, the deal will pass. If not, it wont be finalized, at least in its current form.

The deal wont be assessed in a vacuum, however, but in light of the
increasing consolidation of the games industry. Last year, Microsoft
finalized its acquisition of Doom, Fallout, and The Elder Scrolls parent developer Bethesda, while Grand Theft Auto publisher Take-Two announced its proposed acquisition of mobile games maker Zynga at the top of the year.

And only two weeks after Microsofts acquisition of Activision Blizzard was announced, console competitor Sony revealed its own plans to buy Destiny and Halo developer Bungie for $3.6 billion, signally even greater monopolization of the industry. Read the latest details of Microsoft's buy-up of Bungie in our live blog



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Link to news story: https://www.techradar.com/news/microsoft-activision-deal-to-be-reviewed-by-us- competition-regulators/


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