The FTC sues to block Microsoft's $69B Activision Blizzard acquisition, charging that the deal announced in January may suppress Microsoft's gaming competitors

Lawsuit marks Lina Khan's most significant effort to date to address tech industry consolidation, and it could upend Microsoft's gaming ambitions

The Washington Post 2022-12-09

Context & Ripple Effects

Microsoft’s proposed purchase followed several game-studio acquisitions and was already framed as a likely test for Lina Khan’s antitrust-focused FTC. By late November, staff skepticism had made a lawsuit appear imminent; the filing turns that expected challenge into a live test of the agency’s case against the deal.

The related coverage identifies cloud gaming, rather than only console exclusives, as a central FTC concern. That focus connects the acquisition to Microsoft’s broader position in gaming distribution and subscription access.

First-order effects

Microsoft and Activision Blizzard must now defend the $69B transaction before the FTC, placing the companies’ planned combination under an immediate legal cloud.
The FTC must establish that the acquisition would suppress gaming competitors, despite the related coverage noting judicial skepticism toward challenges to vertical deals where the parties do not directly compete.

Second-order effects

Gaming rivals gain an opening to press concerns about Microsoft’s control over major game content and cloud-gaming distribution while the case proceeds.
The case puts Microsoft’s arguments about access to Activision Blizzard games under closer scrutiny, particularly where the FTC’s officials see cloud gaming as the more consequential competitive market.

Third-order effects

If the FTC can sustain its theory, acquisitions that combine game publishers with console, subscription, and cloud-distribution platforms will face a more demanding antitrust review.
A loss would reinforce the court hurdle identified in the debate over vertical-merger challenges, limiting the FTC’s ability to use this case as a template against tech-platform consolidation.

The trend: The case is part of a broader push to test whether antitrust enforcement can address consolidation across content ownership and digital distribution platforms.

Discussion

Gameranx Ryan Parreno on x
Microsoft Is Apparently Working On A Game That May Take A Decade To Make
Vox Sara Morrison on x
The US government wants to stop the biggest deal in video game history
@bradsmi Brad Smith on x
We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC. While we believe in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present it in court.
@lulumeservey Lulu Cheng Meservey on x
The FTC's job is to protect consumers, not competitors.
@bradsmi Brad Smith on x
We continue to believe that our deal to acquire Activision Blizzard will expand competition and create more opportunities for gamers and game developers.
@cat_zakrzewski Cat Zakrzewski on x
BREAKING: The FTC seeks to block Microsoft's acquisition of gaming publisher Activision Blizzard, in the agency's most significant effort to address tech industry consolidation under Chair Lina Khan. Story w/ @Shannon_Liao: https://www.washingtonpost.com/ ...
@lulumeservey Lulu Cheng Meservey on x
This vote departs from precedent but the law hasn't changed. Any claim the deal is anticompetitive ignores facts; the deal benefits gamers and the industry, especially given competition from abroad. We look forward to proving our case in court and closing our deal with Microsoft
@fxshaw Frank X. Shaw on x
Official statement re: FTC press release. https://twitter.com/...
@stephentotilo Stephen Totilo on x
Bobby Kotick message to Activision Blizzard employees: “This sounds alarming, so I want to reinforce my confidence that this deal will close. ” “We believe these arguments will win despite a regulatory environment focused on ideology and misconceptions about the tech industry” ht…
@shannon_liao Shannon Liao on x
EXCLUSIVE: The FTC is suing to block Microsoft buying Activision Blizzard. Microsoft has not seen such a serious regulatory threat to its business in more than two decades. From @Cat_Zakrzewski and I. https://www.washingtonpost.com/ ...
@stephentotilo Stephen Totilo on x
Some notable details from the FTC's full complaint re: Microsoft-Activison - Calls Zenimax purchase a “preview” of what this deal could do - Says Nintendo isn't part of a relevant market it is considering ("high performance consoles" - Sony vs Xbox) https://www.ftc.gov/...
@stephentotilo Stephen Totilo on x
We rephrased to make this more clear. The nature of the FTC's suit still gives Microsoft and Activision good odds in the U.S. But the nature of the FTC's suit doesn't preclude the EU or UK from blocking https://twitter.com/...
@tim_bays Tim Baysinger on x
Key detail from @ashleyrgold and @stephentotilo: “The agency is not seeking a preliminary injunction to stop the deal from closing, so the two parties are still likely to close.” https://twitter.com/...
@grovernorquist Grover Norquist on x
The out-of-control FTC is suing to block Microsoft from acquiring Activision, a disastrous decision for innovation and U.S. international competitiveness. This is just the latest step in Lina Khan's radical quest to micromanage the American economy. https://www.axios.com/...
@tim_bays Tim Baysinger on x
A bit more context on this: As with MGM/Amazon, the FTC did not approve that merger but let the deadline pass. It has the authority if it wants to try to block mergers after they close. https://twitter.com/...
@samuelstolton Samuel Stolton on x
Microsoft holding firm. FTC decided against accepting commitments that MS pitched earlier this week @BradSmi https://twitter.com/... https://twitter.com/...
@jezcorden Jez on x
It's so weird that they cite Redfall and Starfield as examples of games Xbox is “blocking” from PlayStation. If the FTC is establishing precedent, does Xbox now get God of War? That seems to be what they want to establish here. 🤔 🤔 https://twitter.com/...
@samuelstolton Samuel Stolton on x
.@FTC full complaint against Microsoft / Activision is scathing on MS's backsliding regarding assurances given to DG COMP at the time of the ZeniMax deal: https://www.ftc.gov/... https://twitter.com/...
@charlieintel @charlieintel on x
The FTC seems to be going all in on Microsoft's Bethesda acquisition as the reason to stop the ABK deal, stating MSFT made numerous statements to regulators about Bethesda that they since changed: FTC's full complaint is here: https://www.ftc.gov/... https://twitter.com/...
@daviddoel David Doel on x
Weird to see the FTC intervene in what is maybe one of the only tech acquisitions that isn't terrible. MS acquiring Activision would absolutely benefit the workers at Activision, and the quality of games they put out. Only debate is over long-term impact on the industry. https://…
@tomwarren Tom Warren on x
the FTC's complaint against Microsoft has been published in full. An evidentiary hearing has been set for August 2023. Since Microsoft has offered concessions and FTC hasn't sought an injunction to block the deal from closing... more concessions incoming? https://www.ftc.gov/...
@epro Emil Protalinski on x
The FTC must move faster: 11 months is eons in tech, and doesn't even include the time the courts will take. https://twitter.com/...
@paultassi Paul Tassi on x
this seems, uh, sort of important https://twitter.com/...
@g27status @g27status on x
The FTC's lawsuit would likely explain the hastiness of Xbox to announce their Nintendo/Steam deals involving Call Of Duty. Get cozy, folks. We're in for quite the ride! https://twitter.com/...
@matthewstoller Matt Stoller on x
Probably not good karma that the President of Microsoft invokes John Lennon on the anniversary of his murder. https://twitter.com/...
@kerrymflynn Kerry Flynn on x
“If the FTC is successful, it will be a major blow to the biggest attempted deal in gaming history. And the suit itself is another clear signal from the agency that any big tech co looking to buy a smaller one should be wary” -@ashleyrgold + @stephentotilo https://www.axios.com/.…
@carnage4life Dare Obasanjo on x
Also props to Microsoft's PR team on landing the message that this deal was going to make Call of Duty on Nintendo a reality and now the FTC is blocking that from happening. https://t.co/9eSWbQNrtg
@kantrowitz Alex Kantrowitz on x
Brad Smith on political influence: “Politicians in the United States have events, they have weekend retreats, you have to write a check and then you're invited and participate.” https://www.cnbc.com/... https://twitter.com/...
@deitaone @deitaone on x
ACTIVISION BLIZZARD CEO BOBBY KOTICK SAYS WANT TO REINFORCE MY CONFIDENCE THAT MICROSOFT DEAL WILL CLOSE $ATVI https://twitter.com/...
@devindra Devindra Hardawar on x
Microsoft lawyers https://twitter.com/... https://twitter.com/...
@tomwarren Tom Warren on x
Microsoft responds to the FTC suing to block its Activision Blizzard deal. @BradSmi says “while we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court.” the war begins 😬 https://www.theverge.com/...
@pkafka Peter Kafka on x
Microsoft has spent the year yelling from the rooftops that it would promise to make Activision's flagship asset - Call of Duty - available on Sony and other rival companies' platforms (hence this week's Nintendo announcement). Not enough for the FTC. https://www.ftc.gov/...
@mforbeck Matt Forbeck on x
FTC moves to block Microsoft from buying Activision Blizzard. I'm not surprised to see this. There's been a lot of consolidation the industry over the past few years, and it's reaching a peak with this. https://www.ftc.gov/...
@aatilley Aaron Tilley on x
FTC sues to block Microsoft's Activision deal. Points to past behavior: “Microsoft decided to make several of Bethesda's titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust.” https://www.ftc.gov/...
@sarafischer Sara Fischer on x
🚨🚨🚨 The FTC says it will sue to block @Microsoft's acquisition of @ATVI_AB. —The trial's outcome will set a huge precedent for media/tech/gaming M&A moving forward — Defining moment for the Biden Admin, which has vowed to crack down on antitrust https://www.ftc.gov/...
@film_girl @film_girl on x
Oh, come on FTC! It's like you don't want me to have CoD on my Nintendo Switch X Pro Lite or whatever they're going to call it AND you want my stock to go down. Way to ruin Christmas and Hanukkah. https://www.wsj.com/...
@pkafka Peter Kafka on x
This what I wrote in January, and back then and since then literally every person I know who understands the games biz has told me Washington would have no reason to stop a Microsoft/Activision deal. Lina Khan thinks otherwise. https://www.vox.com/... https://twitter.com/...
@reckless Nilay Patel on x
Today was the first day of trial in the FTC's case against Meta buying Supernatural; if they're trying to block that they have to block a much bigger and more impactful deal
@reckless Nilay Patel on x
Microsoft tried everything to avoid FTC trying to block Activision deal but it was always inevitable I think https://www.theverge.com/...
@tomwarren Tom Warren on x
BREAKING: the FTC is suing Microsoft to block its Activision Blizzard purchase. Full details here: https://t.co/tdGFhbeULa https://t.co/BI7dBOFVK6
@vahn16 Nathan Grayson on x
the ftc is suing to block microsoft's purchase of activision blizzard, which is absolutely no longer the foregone conclusion many thought it was at the start of the year https://www.washingtonpost.com/ ...

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