Here’s how the US is holding back Microsoft on Activision Blizzard
The Federal Trade Commission, the US antitrust authority, has filed a lawsuit to block Microsoft's acquisition of video game company Activision Blizzard because it would harm competition in the sector. Facts and insights
The US administration slows down Microsoft's aims with Activision Blizzard, the company that develops 'Call of Duty' and many other successful video games.
The Federal Trade Commission (FTC), the US antitrust authority, has launched a lawsuit to block the acquisition of the US company Activision Blizzard by Microsoft.
According to the FTC, the 69 billion dollar operation would have a negative impact on competition in the video game production sector.
The acquisition, announced by Microsoft in January , has attracted regulatory hurdles not only in the United States but also in the European Union and the United Kingdom. At the same time, Sony has criticized the deal and has even called for a regulatory veto. Once the transaction closes, Microsoft would become the world's third-largest video game company by revenue, behind Tencent and Sony.
"The Federal Trade Commission lawsuit to block Microsoft's acquisition of Activision Blizzard marks the largest technology antitrust move by the US government in years," said Axios .
All the details.
THE MOTIVATIONS OF THE FTC
The Federal Trade Commission is trying to stop Microsoft from acquiring video game developer Activision Blizzard, arguing the deal would allow Microsoft to eliminate competitors for its Xbox game consoles and rapidly growing subscription content and gaming business. cloud gaming.
If approved, the deal would change Activision's strategy of offering its games on many devices regardless of manufacturer, the FTC said.
COMPETITION ISSUE…
Additionally, in its filing, the FTC highlighted Microsoft's record of acquiring and using valuable gaming content to suppress competition from rival consoles, including the $7.5 billion (cash) acquisition of ZeniMax Media, the company that owns Bethesda Softworks, production house and publisher of video games in 2020.
With control over Activision's successful franchises, Microsoft would have both the means and motives to harm competition by manipulating Activision's prices, degrading Activision's game quality or player experience on rival game consoles and services, modifying the terms and times of accessing Activision content or rejecting content entirely from competitors, resulting in harm to consumers.
… AND CONSUMER PROTECTION
“Microsoft has already shown that it can and will hide content from its gaming rivals,” said Holly Vedova, director of the FTC's Bureau of Competition. "Today we seek to prevent Microsoft from gaining control of a leading independent game studio and using it to harm competition in multiple fast-growing and dynamic gaming markets."
Therefore, the agency has scheduled a hearing before an administrative law judge for August 2023.
THE MOVES OF THE REGULATORS IN THE EU AND UK
Furthermore, there are also problems in Europe: a few weeks ago, the European Commission announced the opening of an in-depth investigation into the operation. Indeed, Brussels wants to analyze the possible reduction of competition in the video game sector. An antitrust investigation is also underway in the UK.
THE CONCESSIONS OF THE COLOSSUS OF REDMOND ARE NOT ENOUGH
The reassurances of the company led by Satya Nadella to the regulatory authorities were not enough.
Microsoft had already announced that it will license popular games like Call of Duty to other platforms like Nintendo and Playstation after the acquisition.
MICROSOFT'S REACTION
“We continue to believe this deal will broaden competition and create more opportunities for gamers and game developers. We have been committed to addressing competition concerns since day one, including offering proposed concessions to the FTC earlier this week,” Microsoft President Brad Smith said in a statement.
But the Redmond giant is not giving up: Microsoft will address the FTC's objections in court and has "full confidence in our case," concluded President Brad Smith.
LINA KHAN'S KNIGHT FIST WITH BIG TECH
So the cause is the FTC's biggest move under chairman Lina Khan to curb the power of the world's biggest tech companies.
But it is certainly not the only one. The lawsuit was announced on the same day that a lawsuit against Meta, the company that owns the Facebook and Instagram platforms, also launched by the FTC to block the acquisition of Within, began in San Jose, California. a technology company specializing in the production of virtual reality devices. The FTC sued in July to stop the deal, saying Meta's acquisition of Within "would tend to create a monopoly" in the virtual reality (VR) fitness app market.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/ecco-come-gli-usa-frenano-microsoft-su-activision-blizzard/ on Fri, 09 Dec 2022 12:31:41 +0000.