FTC Seeks to Block Microsoft's Acquisition of Activision, Bobby Kotick's Response

[Lumy]

FTC Seeks to Block Microsoft's Acquisition of Activision Blizzard
The US Federal Trade Commission (FTC) has issued a complaint to block Microsoft's proposed $69 billion acquisition of video game developer Activision Blizzard. The regulator alleges that the deal would allow Microsoft to suppress competitors to its Xbox gaming consoles, subscription content, and cloud-gaming business.

The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises such as Call of Duty, alleging that the $69 billion deal, Microsoft’s largest ever and the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.

In a complaint issued today, the FTC pointed to Microsoft’s record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda's titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, Director of the FTC’s Bureau of Competition. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

Microsoft’s Xbox Series S and Series X are one of only two types of high performance video game consoles. Importantly, Microsoft also offers a leading video game content subscription service called Xbox Game Pass, as well as a cutting-edge cloud-based video game streaming service, according to the complaint.

Activision is one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices, including video game consoles, PCs, and mobile devices. It produces some of the most iconic and popular video game titles, including Call of Duty, World of Warcraft, Diablo,and Overwatch, and has millions of monthly active users around the world,according to the FTC’s complaint. Activision currently has a strategy of offering its games on many devices regardless of producer.

But that could change if the deal is allowed to proceed. With control over Activision’s blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely, resulting in harm to consumers.

The Commission vote to issue the complaint was 3-1, with Commissioner Christine S. Wilson voting no. A copy of the administrative complaint will be available shortly.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about how competition benefits consumers or file an antitrust complaint. For the latest news and resources, follow the FTC on social media, subscribe to press releases and read our blog.

Bobby Kotick's Response
In response to the Federal Trade Commission's decision to challenge the pending merger with Microsoft, Activision Blizzard CEO Bobby Kotick has sent a letter to all employees.

In the letter, Bobby addresses the challenge and says that the company believes it will win the challenge, stating that the allegations of anti-competitiveness "don't align with the facts". Bobby also emphasizes the benefits of the merger for players, employees, competition, and the gaming industry as a whole.

Team,

I wanted to provide a brief update on our pending merger with Microsoft. This week the U.S. Federal Trade Commission (FTC) announced its decision to challenge the deal. This means they will file a lawsuit to block the merger, and arguments will be heard by a judge.

This sounds alarming, so I want to reinforce my confidence that this deal will close. The allegation that this deal is anti-competitive doesn't align with the facts, and we believe we’ll win this challenge.

Thanks to the hard work by all of you every day, we’re on a strong path, bringing epic joy to players around the world with what I believe are the greatest games in the industry. At the same time, the competitive landscape is shifting, and, simply put, a combined Microsoft-ABK will be good for players, good for employees, good for competition and good for the industry. Our players want choice, and this gives them exactly that. You can read more about the specifics on those points in this update we recently shared with you.

We believe these arguments will win despite a regulatory environment focused on ideology and misconceptions about the tech industry.

Thank you for your dedication and creativity.

Bobby

[plz delete account]

FTC wants to keep the guy in the black book of names in power at ABK. Disgusting.

[agentsi]

FTC wants to keep the guy in the black book of names in power at ABK. Disgusting.

I'll take crazy conspiracy theories for 200 Alex.

[Tech614]

FTC wants to keep the guy in the black book of names in power at ABK. Disgusting.

https://www.thegamer.com/microsoft-e...nt-new-report/

Oh so this is the company that's gonna clean them up?

[tomten]

https://www.thegamer.com/microsoft-e...nt-new-report/

Oh so this is the company that's gonna clean them up?

Reality is? This is every company on earth. Because its human nature to be that way. yes yes, its super bad the last 5 years and bad the last 15 and not caring 25 years ago. Then remember humans are quite older than 25 years.

[Tech614]

Reality is? This is every company on earth. Because its human nature to be that way. yes yes, its super bad the last 5 years and bad the last 15 and not caring 25 years ago. Then remember humans are quite older than 25 years.

Exactly this, which is why it's hilariously sad for people to think MS is some saint company buying them to clean up their culture. The reality is MS took advantage of the situation to acquire them, but has all the same skeletons in their closet as all corps do.

[Ihavewaffles]

I hope the merger doesn't happen, not only that, I hope they rip activision out of blizzard. That way the only way Blizz can make money n stand on their feet is if they start to make good games again...THE HORROR!

[Baraden]

MS have already indicated they're prepared to counter-sue, and given that the FTC has literally no legal grounds here, they would win

It won't go that far of course, it's just chest-pounding

[tomten]

I hope the merger doesn't happen, not only that, I hope they rip activision out of blizzard. That way the only way Blizz can make money n stand on their feet is if they start to make good games again...THE HORROR!

Or...they just fail and they stop making games altogether. Pick your poison.

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MS have already indicated they're prepared to counter-sue, and given that the FTC has literally no legal grounds here, they would win

It won't go that far of course, it's just chest-pounding

What? I dont think the word literally means what you literally think it means.
How do they not have any legal grounds?

[plz delete account]

I'll take crazy conspiracy theories for 200 Alex.

How is it a conspiracy? if the FTC wins, Kotick remains in power at ABK. If the merger goes through, Spencer is already on record saying Kotick would not remain with the company.

[Proskill]

How is it a conspiracy? if the FTC wins, Kotick remains in power at ABK. If the merger goes through, Spencer is already on record saying Kotick would not remain with the company.

kotick himself wants the merge to happen

[plz delete account]

kotick himself wants the merge to happen

Because he's going to get paid bank. $69B.

[tomten]

Because he's going to get paid bank. $69B.

So you're agreeing both want the merger to happen yet not? what?

[RobertMugabe]

I really don't get it what's the big fuss about all this. And especially the hypocrisy from Sony whose Playstation's basically outsell Xbox every time mainly because of the many many exclusive deals and exclusive studios they have bought. If MS were to buy ABK, they still wouldn't be a bigger game developer/publisher than Sony AFAIK.

Just let them buy ABK, I don't even care all that much about CoD as a CoD player myself, since I know that MS will keep releasing them for all platforms, because they make more money through that rather than encouraging people this way to buy their consoles. All I want is WoW to become a part of Game Pass and possibly even get a console port (with both controller and keyboard support ofc which is common on Xbox nowadays), as WoW is the only reason I still have a gaming PC.

[Celement]

I'll take crazy conspiracy theories for 200 Alex.

What's crazy about... hell what is crazy these days?

Epstien proved major aspects of the 90s satanic panic were real retroactively. What is crazy in today's age?

[RobertMugabe]

I hope the merger doesn't happen, not only that, I hope they rip activision out of blizzard. That way the only way Blizz can make money n stand on their feet is if they start to make good games again...THE HORROR!

I disagree. Blizzard still makes great games (with ups and downs and good and bad decisions ofc). And I can bet that even if you say the opposite (and still engage on a website that is 90% about WoW), you most definitely still play their games.

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https://www.thegamer.com/microsoft-e...nt-new-report/

Oh so this is the company that's gonna clean them up?

I mean this is mostly about one guy and like come on, comparing THIS to fucking Epstein is not a fair comparison at all. In a company with over 200k employees and hundreds of execs, having a couple of assholes is not something which makes MS a terrible company.

[Tech614]

I mean this is mostly about one guy and like come on, comparing THIS to fucking Epstein is not a fair comparison at all. In a company with over 200k employees and hundreds of execs, having a couple of assholes is not something which makes MS a terrible company.

A quick google search will tell you this is not a single incident and you can find articles about it nearly bi yearly for the past decade. But nice deflection attempt thinking any large corp doesn't have these same issues only the one you wanted to crusade against did.

MS isn't buying A/B to clean up their culture... they took advantage of the situation at A/B to acquire them and make their own corp stronger. Call it what it is and stop acting like this is good when it's the same shit with consolidation which is inherently bad for industries.

[Hctaz]

FTC wants to keep the guy in the black book of names in power at ABK. Disgusting.

Definitely don't think this is the reason why this is happening at all.

In the initial report for the concern, it was cited how MS has previously acquired game studios with the statement that they would not force these studios to make their games suddenly become MS exclusives. They then did absolutely make their games MS exclusives.

So, in this instance, the past dealings of Microsoft is the reason that they're trying to block the merger, not because of anything related to Activision.

[Razzako]

FTC wants to keep the guy in the black book of names in power at ABK. Disgusting.

Because he's going to get paid bank. $69B.

i can't even

[Slowpoke is a Gamer]

If they block this then they need to go back and bust up Disney, enough said.